Ky., 43 other states sue generic drug makers, alleging price fixing; Beshear sues 3 top insulin manufacturers, making similar claim
Kentucky is among 44 states that filed a lawsuit Friday in federal court in Connecticut, accusing 20 manufacturers of generic drugs of fixing prices and suppressing competition.
Meanwhile, Attorney General Andy Beshear announced that he had also sued the three major makers of insulin for driving up prices. In both cases, he is seeking changes in conduct, recovery of excess profits and civil penalties.
Beshear, a candidate for the Democratic nomination for governor, is one of many politicians who have targeted drug companies over price increases in the last decade. “The criticism has come from across the political spectrum,” the international news agency Reuters notes. “Generic drugs can save drug buyers and taxpayers tens of billions of dollars a year because they are a lower-priced alternative to brand-name drugs.” Generics account for 90 percent of U.S. prescriptions, one official told CBS News.
The generics suit claims the companies “engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them,” Reuters reports
. The suit claims Teva Pharmaceuticals USA
, the American subsidiary of Israeli-based Teva Pharmaceutical Industries Ltd.
, orchestrated the scheme.
Teva said in a statement, “The allegations in this new complaint, and in the litigation more generally, are just that – allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.”
The 500-page lawsuit “is parallel to an action brought in December 2016 by the attorneys general of 45 states and the District of Columbia,” Reuters notes. “That case was later expanded to include more than a dozen drugmakers.”
Since 2016, generic-drug prices have declined slightly, but “I don’t think that means the conspiracy has ended,” Connecticut Attorney General William Tong told CBS’s “60 Minutes
.” He added, “If they stopped colluding, you would expect prices to go down dramatically.”
Tong said his investigators found “an industry-wide conspiracy” that answers the question, “Why are prescription drugs so expensive?” He said everyone in America is affected: “It affects health-insurance premiums . . . it impacts Medicare and Medicaid, and it is a chain reaction that drives up the price of American health care to unnatural heights.”
The latest suit “accuses the generic drug industry, which mainly sells medicines that are off-patent and should be less expensive, of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a ‘fair share’,” Reuters reports.
The suit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
In the other case, in Franklin Circuit Court, Beshear sued Eli Lilly & Co., Sanofi-Aventis Pharmaceuticals and Novo Nordisk, alleging that they “have increased the price of their analog insulin products at least 10 times, while the costs to make insulin have stayed low, usually less than $7 per vial,” a news release from his office said. “The wholesale price has jumped to nearly $300 and the price paid by those Kentuckians hit hardest by the deception can exceed $1,000 a month.”
The suit “alleges that Kentuckians without insurance or on high-deductible health plans, Medicare Part D recipients, and those who pay co-insurance are hurt most, as they are forced to pay the full amount or a percentage of the artificially inflated list price of the drug,” the release says. “The companies who control the drug market, pharmacy benefit managers, pay a lower, negotiated price. As a result, Kentuckians pay too much for their insulin, while the PBMs profit by paying less. Through this deceptive strategy, drug makers curry favor with PBMs and are able to not only retain profits, but also increase their number of sales.”
Beshear noted that Kentucky has the seventh highest rate of diabetes in the nation.