Case Details

Year Initiated/Committed

2016

Settlement Amount

n/a

Court

U.S. District Court for the District of Connecticut

Docket Number

3:16-cv-02056

Lead State

CT, DE, FL, HI, IA, ID, KS, KY, LA, MA, MD, ME, MN, ND, NV, NY, OH, PA, VA, WA

Participating States

CT, DE, FL, HI, IA, ID, KS, KY, LA, MA, MD, ME, MN, ND, NV, NY, OH, PA, VA, WA

Defendant(s)

TEVA PHARMACEUTICALS USA, INC.; ACTAVIS HOLDCO US, INC.; ACTAVIS PHARMA, INC.; AMNEAL PHARMACEUTICALS, INC.; APOTEX CORP.; ARA APRAHAMIAN; AUROBINDO PHARMA U.S.A., INC.; DAVID BERTHOLD; BRECKENRIDGE PHARMACEUTICAL, INC.; JAMES (JIM) BROWN; MAUREEN CAVANAUGH; TRACY SULLIVAN DIVALERIO; DR. REDDY’S LABORATORIES, INC.; MARC FALKIN; GLENMARK PHARMACEUTICALS, INC., USA; JAMES (JIM) GRAUSO; KEVIN GREEN;
GREENSTONE LLC; ARMANDO KELLUM; LANNETT COMPANY, INC.; LUPIN PHARMACEUTICALS, INC.; MYLAN PHARMACEUTICALS INC.; JILL NAILOR; JAMES (JIM) NESTA; PAR PHARMACEUTICAL COMPANIES, INC.; NISHA PATEL;
PFIZER, INC.; KONSTANTIN OSTAFICIUK; DAVID REKENTHALER; RICHARD (RICK) ROGERSON; SANDOZ, INC.; TARO PHARMACEUTICALS USA, INC.; UPSHER-SMITH LABORATORIES, LLC; WOCKHARDT USA LLC; ZYDUS PHARMACEUTICALS (USA), INC.

Case Description

45 states sued numerous companies in the generic pharmaceutical industry. The camended complaint, filed in 2019, alleged that the industry “has operated pursuant to an understanding among generic manufacturers not to compete with each other and to instead settle for what these competitors refer to as “fair share.” This understanding has permeated every segment of the industry, and the purpose of the agreement was to avoid competition among generic manufacturers that would normally result in significant price erosion and great savings to the ultimate consumer. Rather than enter a particular generic drug market by competing on price in order to gain market share, competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices. This “fair share” understanding was not the result of independent decision making by individual companies to avoid competing with one another. Rather, it was a direct result of specific discussion, negotiation and collusion among industry participants over the course of many years.”  The states allege that the misconduct was conceived and carried out by senior drug company executives and their marketing and sales executives. The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The states further allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation. The states allege the anticompetitive conduct, including price-fixing and price maintenance, market allocation and other anticompetitive acts, caused significant, harmful and continuing effects in the country’s healthcare system. The states sought an injunction to prevent the companies from engaging in illegal, anticompetitive behavior and also sought equitable relief, including disgorgement.  (The initial complaint was filed by 20 states in 2016). Most recently, the court held that the states were not entitled to disgorgement, a backward-looking equitable remedy, under section 16 of the Clayton Act. The states do have standing as parens patriae to pursue their claims for damages