Florida, other states say generic drug firms conspired

Alleging a conspiracy that has increased drug prices, Attorney General Ashley Moody announced Monday that Florida has joined states across the country in a massive anti-trust lawsuit against generic drug manufacturers.

Florida is one of 43 states and Puerto Rico taking part in the lawsuit filed in federal district court in Connecticut against numerous generic-drug companies and executives. The lawsuit, which comes after a multi-year investigation spearheaded by the Connecticut attorney general’s office, contends that the companies colluded to raise drug prices.

“Inflating and manipulating the pricing of essential drugs prescribed to those with chronic conditions is shameful,” Moody said in a prepared statement Monday, as she and other attorneys general announced the lawsuit. “Routine health care can already be a burdensome cost for individuals, not to mention those suffering with life-altering and critical illnesses, and patients should not have to further worry about rising prescription drug costs of medicine they may desperately need.”

Generic drugs are designed to be lower-cost alternatives to name-brand drugs. But the lawsuit contends that manufacturers communicated with each other to determine market shares to avoid competing. Also, it alleges they agreed to raise or maintain prices for drugs.

“For many years, the generic pharmaceutical 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,’ ” the lawsuit said. “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.”

But in a statement Sunday in response to a “60 Minutes” report about the investigation and lawsuit, the Association for Accessible Medicines, an industry group, said it and generic-drug companies “are committed to supporting policies that promote competition and help speed the availability of generic and biosimilar medicines to patients.”

“Today’s generic drug industry is characterized by intense competition,” the statement said. “As a result, pricing data from the last three years indicate that generic prices have declined overall and saved patients and taxpayers literally billions of dollars compared to brand-name drug prices.”

The lawsuit seeks a ruling that the companies violated federal and state laws and requests payments to the states of “ill-gotten gains,” damages and penalties.

In part, it contends the companies violated a Florida anti-trust law and a law known as the Florida Deceptive and Unfair Trade Practices Act. It seeks money for “purchases of pharmaceuticals by the state of Florida and its government entities and municipalities, Florida businesses, and individual consumers.”

“The state of Florida and its government entities and municipalities, and Florida individual consumers have been injured and will continue to be injured by paying more for pharmaceuticals purchased directly and/or indirectly from the defendants and their co-conspirators than they would have paid in the absence of the conspiracy,” the lawsuit said.