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45 US States Accuse 18 Companies Of Collusion In Broad Generic Drug Price-Fixing

The states said the drugmakers and executives divided customers for their drugs among themselves, agreeing that each company would have a certain percentage of the market.

WASHINGTON – A large group of US states accused key players in the generic drug industry of a broad price-fixing conspiracy, moving on Tuesday to widen an earlier lawsuit to add many more drugmakers and medicines in an action that sent some company shares tumbling.

The lawsuit, brought by the attorneys general of 45 states and the District of Columbia, accused 18 companies and subsidiaries and named 15 medicines. It also targeted two individual executives: Rajiv Malik, president and executive director of Mylan NV, and Satish Mehta, CEO and managing director of India’s Emcure Pharmaceuticals.

Shares of Pennsylvania-based Mylan, also named as a defendant, closed down 6.6%.

The states said the drugmakers and executives divided customers for their drugs among themselves, agreeing that each company would have a certain percentage of the market. The companies sometimes agreed on price increases in advance, the states added.

The states said Malik and Mehta spoke directly to one another to agree on their companies’ shares of the market for a delayed-release version of a common antibiotic, doxycycline hyclate.

“It is our belief that price-fixing is systematic, it is pervasive, and that a culture of collusion exists in the industry,” Connecticut Attorney General George Jepsen, who is leading the case, told a news conference in Hartford.

Mylan said in a statement it had found no evidence of price-fixing by the company or any of its employees, and vowed to defend itself vigorously. Malik, the company’s second-ranking official, has received more than $50 million in compensation over the past three years, last year making more than CEO Heather Bresch.

“Mylan has deep faith in the integrity of its president, Rajiv Malik, and stands behind him fully,” the company said.

Emcure, also a defendant in the case, did not immediately respond to a request for comment.

Two former executives of Emcure’s subsidiary Heritage Pharmaceuticals pleaded guilty in January to federal charges of conspiring to fix prices and divide up the market for doxycycline and the diabetes drug glyburide.

The two men, former Heritage president Jason Malek and former chairman and chief executive Jeffrey Glazer, reached a deal with 41 states and territories in which they each agreed to pay $25,000 and cooperate with the state probe.

Soaring drug prices from both branded and generic drug manufacturers have sparked outrage and investigations in the United States. President Donald Trump this year accused pharmaceutical companies of “getting away with murder” with their drug pricing.

Executives like Mylan’s Bresch and former Turing Pharmaceuticals CEO Martin Shkreli have been called in front of Congress to defend the cost of their products.

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