Generics firms the ‘biggest cartel in US history’ – report
US authorities looking into price fixing in the generics industry are now investigating 16 companies and the price of at least 300 drugs, according to a press report.
The Washington Post reported that the generic companies involved used a form of shorthand to describe how they conducted business.
According to the article, officials from multiple US states say the practices were central to massive illegal price fixing schemes.
There are now several lawsuits surrounding the practices at a time when president Donald Trump is attempting to reduce drug prices in the US.
This is a particularly emotive issue given that many Americans pay all or some of the costs of their medications, depending on their insurance arrangements.
Insider lingo used by generics firm and cited by the Washington Post includes “sandbox”, referring to the market for generics, and “fair share” to describe dividing up sales to ensure each company reaped profits.
“Trashing the market” was used when a competitor ignored the unwritten rules and sold drugs for less than agreed-upon prices.
The Post reported that what began as an antitrust investigation into just two generic companies in 2016 has now expanded to at least 16 companies and 300 drugs.
It cited an interview with Joseph Nielsen, an assistant attorney and general antitrust investigator in Connecticut who has been a leading figure in the investigations.
In the interview, he said: “This is most likely the largest cartel in the history of the United States.”
Precise estimates of the alleged overcharges have not been released, but with sales of around $104 billion in 2017, price hikes could have cost US consumers and the healthcare system billions of dollars.
Among the 16 companies implicated are some of the biggest names in generics – Mylan, Teva and Dr Reddy’s. The Washington Post said the companies had all denied the allegations.
A spokesperson for Teva said: “Teva denies the allegations in this litigation and will continue to vigorously defend itself. Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable competition laws and regulations in doing so.
“Teva fosters a culture of compliance with these laws and regulations, and is dedicated to conducting business with integrity and fairness.”
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