Attorneys General Urge Congress to Adopt Key Changes to the Victims of Crime Act (VOCA)
As state Attorneys General, we are often the administrators of grant funding, through our state compensation programs or otherwise, financed directly from the Fund. In order to ensure the predictability and sustainability of these critical funds, change must be enacted to support our states’ ability to effectively serve victims and survivors of crime for years to come.
NAAG Endorses Stopping Overdoses of Fentanyl Analogues (SOFA) Act
States and localities are on the front line of this crisis and are a large part of winning the battle from both a law enforcement and public health perspective.
Washington v. LG Electronics (Philips settlement), No. 12-2-15842 (King Cty Super. Ct., Wash. June 14, 2018
The state alleged that Philips participated in an unlawful conspiracy with other CRT manufacturers(including LG< Panasonic, Hitachi, Chungwha, Toshiba and Samsung, to raise, fix, maintain, or stabilize the price of Cathode Ray Tubes at artificially high levels and to maintain the quantities of CRTs at artificially low levels, in violation of Washington's consumer protection and antitrust statutes. The state alleged this conspiracy continued from 1995 to 2007.The lawsuit alleges Philips representatives attended secret meetings with other companies, known internally as "glass meetings,†in which they agreed to fix prices of CRTs. For example, the companies agreed to artificially restrict supply to keep prices high and share information with competitors regarding capacity, production, prices and customer demands for CRTs.According to the lawsuit, conspirators split the glass meetings into three tiers: "top meetings†for high-level company executives, "management meetings†for mid-level managers, and "working-level meetings†for lower-level sales and marketing employees. Philips attended meetings at all three levels. The lawsuit alleges the companies' scheme allowed them to keep CRT prices high, even as liquid crystal display, or LCD, screens were introduced to the market. Philips no longer produces CRTs. Philips agreed to pay $7 million to recompense Washington consumers.
Washington v. LG Electronics (Samsung settlement), No. 12-2-15842 (King Cty Super. Ct., Wash. June 14, 2018
The state alleged that Samsung participated in an unlawful conspiracy with other CRT manufacturers(including LG, Panasonic, Hitachi, Chungwha, Toshiba and Philips, to raise, fix, maintain, or stabilize the price of Cathode Ray Tubes at artificially high levels and to maintain the quantities of CRTs at artificially low levels, in violation of Washington’s consumer protection and antitrust statutes. The state alleged this conspiracy continued from 1995 to 2007.The lawsuit alleges Samsung representatives attended secret meetings with other companies, known internally as “glass meetings,†in which they agreed to fix prices of CRTs. For example, the companies agreed to artificially restrict supply to keep prices high and share information with competitors regarding capacity, production, prices and customer demands for CRTs.According to the lawsuit, conspirators split the glass meetings into three tiers: “top meetings†for high-level company executives, “management meetings†for mid-level managers, and “working-level meetings†for lower-level sales and marketing employees. Samsung attended meetings at all three levels. The lawsuit alleges the companies’ scheme allowed them to keep CRT prices high, even as liquid crystal display, or LCD, screens were introduced to the market. Samsung no longer produces CRTs. Philips agreed to pay $7 million to recompense Washington consumers.
California et al. v. Teikoku Seikayu Co.(Lidoderm), No. 3:18-cv-00675 (N.D. Cal. 01/31/18)
Plaintiff states alleged that defendant, the producer of Lidoderm (pain medication), paid or incentivized generic drug makers to delay entry into market to protect its monopoly on Lidoderm. (“pay for delay”) The settlement agreement, which expires in twenty years, prohibits Teikoku from entering into agreements that restrict generic drug manufacturers from researching, manufacturing, marketing, or selling products for a period of time and requires Teikoku to cooperate in an ongoing investigation into similarly anticompetitive conduct by other drug manufacturers, among other things.
State of Washington v.Franciscan Health System et al, No. 3:17-cv-05690 (W.D. Wash.Aug. 31, 2017)
Plaintiff state sought to enjoin two transactions. The first was the acquisition by CHI Franciscan, a health system on the Kitsap Peninsula, of WestSound, an orthopedic physician practice. The second was CHI’s agreements with The Doctors Clinic (TDC), a multispecialty physician practice, under which TDC would receive CHI Franciscan’s negotiated reimbursement rates with payers. TDC and CHI Franciscan remain separate entities. The state alleged that the purpose of these transactions was to “win the ability to charge higher rates for physician services, and to collectively gain negotiating clout over healthcare payers by removing head-to-head competition.” The state also alleged that the affiliation between Franciscan and TDC is a price-fixing agreement which has led to increased wait times, difficulty in scheduling procedures, and a reduction in patient choice of services and locations. The parties reached a settlement that 1) bars CHI Franciscan from entering into similar agreements in the future; 2) requires the health system to give the Attorney General’s Office advanced notice of future arrangements that could decrease competition; 3) divest its controlling interest in an outpatient surgery center it acquired in Silverdale; 4)requires primary care physicians and orthopedists at The Doctors Clinic to contract with insurers separately from CHI Franciscan if the insurers desire; 5) forces CHI Franciscan to allow for incentive-based payments to The Doctors Clinic physicians for providing higher quality of care, instead of higher patient volume; 6) requires Franciscan and The Doctors Clinic to notify Kitsap Peninsula imaging patients of imaging facility options available to them other than Harrison Medical Center and 7) pay up to $2.5 million as a cy pres distribution, to be distributed by the Attorney General’s Office among at least four health providers to increase access to health care on the Kitsap Peninsula. The grant money will go toward direct patient services.
Alaska v. Crowley Marine Services et al., No. 3AN-04-100 Civil. (Alaska Superior Court, 2005)
Alaska initiated an investigation of the merger between two companies providing barge-delivered petroleum products to western Alaska. A consent decree was reached between the parties that requires significant divestiture of vessels, storage facilities, and property to a qualified buyer approved by the state. The consent decreed was filed for approval in the Alaska Superior Court, and was approved in September, 2005 after a hearing to consider strong opposition from fuel customers in western Alaska.
FTC and Plaintiff States v. Mallilnckrodt Ard Inc. (formerly Questcor), No. 1:17-cv-00120 (D.D.C. Jan. 18, 2017)
Four states and the FTC reached a $100 million settlement with Mallinckrodt plc and its US subsidiary, formerly known as Questcor Pharmaceuticals, Inc. resolving a lawsuit accusing Questcor of monopolizing the market for Achthar, the only adrenocorticotropic hormone (ACTH) based therapeutic drug sold in the United States. ACTH is used as a last resort to treat infantile spasms and multiple sclerosis. Questcor allegedly blocked competition for Acthar by disrupting the bidding process and acquiring the U.S. rights for Synacthen Depot, the only other ACTH based drug sold in the world. In 2001, Questcor bought the rights to Acthar and increased the price of it by 85,000 percent, charging over $34,000 for a vial of the drug that used to cost $40 per vial. In 2012, Novartis Pharma A.G sold the U.S. rights of Synacthen, Achthar’s only competitor. The complaint alleges that three other companies had all conducted due diligence and submitted formal offers for Synacthen with plans to develop and launch Synacthen in the United States in direct competition with Questcor. However, perceiving the threat to its U.S. monopoly if a rival drug company purchased the assets, Questcor stepped in to outbid the three other companies, offering Novartis $135 million in guaranteed payments with only vague plans for Synacthen and after very limited due diligence. Through the acquisition, Questcor sought to extinguish the most likely challenges to its Acthar monopoly. According to the complaint, this allowed Questcor to continue charging over $34,000 per vial for H.P. Acthar Gel. In addition to paying $100 million in disgorgement, Under the settlement, Mallinckrodt will pay $100 million. The company will also be required to license a competitor to the rights it acquired from Novartis to commercialize and develop Synacthen in the United States, including the Synacthen trademark, along with clinical trial data and certain intellectual property related to manufacturing and formulation. Mallinckrodt is also prohibited from taking actions that would interfere with clinical trials or clinical plans for Synacthen.
State of Wisconsin et al. v. Indivior, No. 16-5073 (E.D. Pa. Sept. 22,2016)
Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.
Connecticut et al. v. Teva Pharmaceuticals et al. Civ. Action No. (D.Conn. Dec. 15, 2016)
Twenty states filed a federal lawsuit against six generic drug manufacturers, alleging that they entered into long-running and well coordinated illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication. The lawsuit was filed under seal to avoid compromising a continuing investigation. In the complaint, 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. An additional 20 states joined the complaint in March 2017.
