Drug price-fixing complaint unsealed
Unredacted Emails Provide Evidence of Conspiracy to Inflate Prices and Hinder Competition, Obstruct Justice
June 25, 2019
(Anchorage, AK) – Alaska Attorney General Kevin G. Clarkson joined Connecticut Attorney General William Tong and 42 other states, along with Puerto Rico, yesterday in releasing the full, unredacted complaint (18.81MB PDF) against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers after the court granted the states' motion to unseal the complaint.
Among the evidence now public are emails between generic drug manufacturers coordinating their response to a Congressional inquiry, emails enforcing "fair share" and "playing nice in the sandbox" market allocation, "fluff pricing" strategy and other brazen coordination to artificially inflate prices, hinder competition and unreasonably restrain trade across the industry.
The lawsuit was first filed by Alaska, Connecticut and 42 other states on May 10 in U.S. District Court for the District of Connecticut.
"Frankly, this type of behavior is unconscionable," said Attorney General Clarkson. "I am glad the court agreed to disclose the full complaint so Alaskans can see the misleading and illegal collusion these companies appear to have been engaged in. And all at the expense of people's health."
The following are just a few examples of the information that can now be shared publicly:
"I guess this is what they call co-opetition"
In one series of exchanges, senior executives at Mylan and Sandoz allegedly colluded to divvy up market share for a blood pressure medication. Both companies were the first to launch generic Valsartan on the same day, September 12, 2012. Leading up to the launch, records show company representatives spoke at least 21 times by phone to allocate the market so that each competitor could obtain roughly 50 percent market share. The conspiracy apparently pleased company executives, including a Sandoz executive who stated, "sometimes a little help from our competition is welcome as well." Another senior executive replied: "I guess this is what they call "co-opetition."
High Quality Competitors
As Director of National Accounts at Teva, Defendant Nisha Patel's primary responsibility was to implement price increases. The complaint alleges that she did this by systematically conspiring with Teva's competitors—even maintaining a numerical ranking system of those companies based on the quality of their collusive relationships. The most collusive received a +3 and the least cooperative were assigned a -3. Detailed rankings and charts documenting her communication with competitors have been unsealed. (See page 162 of the unredacted complaint).
The complaint alleges that Ms. Patel’s first order of business upon joining Teva was to figure out a way to increase drug prices.
Industry Code Words Revealed: Playing Nice in the Sandbox, Fair Share, Fluff Pricing
The unredacted complaint reveals commonly used code words used by coconspirators as they colluded with competitors to divvy up market share and coordinate on price increases in violation of state and federal antitrust law. These include "fair share," "playing nice in the sandbox," and "fluff pricing." (See page 147 of the unredacted complaint).
In addition to Alaska and Connecticut, Alabama, Arizona, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.
CONTACT: Assistant Attorney General Jeff Pickett at (907) 269-5100 or email@example.com.
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Department Media Contact: Senior Assistant Attorney General Cori Mills at (907) 465-2132 or firstname.lastname@example.org.