Nationwide Generic Drug Pricing-Fixing Investigations Continue to Expand

Federal and state prosecutors are bearing down on pharmaceutical giants, and the glare on the lucrative generic drug industry is showing no signs of waning: last week, the Attorney General of Alabama announced it joined 39 other states suing many of the largest pharmaceutical corporations in the world for unlawfully skyrocketing the prices of common, household prescription medication to unprecedented levels.

In 2014, prices for over 1,200 generics had jumped an average of 448% from July 2013 to July 2014, prompting the Antitrust Division of the United States Department of Justice (“DOJ”) an many states to launch widespread criminal investigations of a broad conspiracy to fix the prices of generic drugs. Two years of comprehensive investigations – which are still ongoing – resulted in guilty pleas by two high-ranking executives of drug manufacturing corporations for their price-fixing scheme, and an onslaught of civil complaints filed by one state after another.

Cotchett, Pitre, and McCarthy (“CPM”) represent the End-Payor Plaintiffs injured by the unlawful price manipulation, accusing manufacturing leaders in the pharmaceutical industry (“Defendants”) for illegally inflating the prices of doxycycline – a frequently-prescribed antibiotic – and digoxin – a decades-old, critical heart medication. The increases in price in the past few years were staggering: generic doxycycline, which had an average market price of $20 in October 2013 would explode to a whopping $1,849 per bottle less than 6 months later – a staggering 8,281% increase in price. Similarly, a single tablet of generic digoxin in October 2012 had an average market price of $0.11 per pill – but by June 2014, the average price would be $1.10, an 884% increase in price.

The implications of Defendants’ activity are far-reaching and highly consequential: generic drugs are a critical staple of America’s healthcare system, and have for decades provided substantially lower-cost alternatives to brand-name medication treating common ailments that would otherwise be cost-prohibitive for many – if not most – Americans. Generic medication comprises the bulk of prescriptions filled – 88% of prescription medication filled are generics rather than their brand-name equivalents. As CPM partner Steven Williams notes, “generic medication is widely favored as a lower-priced option to branded products, and Defendants – for their own benefit – have virtually eliminated any opportunity of that with respect to, as we’re seeing, multiple common generics.” 

By participating in the price-fixing of generic drug markets, Defendants directly jeopardized – and are continuing to jeopardize – the health of millions of Americans who needlessly struggle because a simple, common cure for their ailments is now financially out of reach due to Defendants’ unlawful activity.

CPM is currently actively investigating similar conduct by Defendants with respect to multiple other common generic prescription drugs. As Connecticut’s Attorney General George Jepsen – the first state to file a lawsuit – emphasized: the “investigation is continuing, and it goes way beyond the two drugs in this lawsuit, and it involves many more companies than are in this lawsuit.” The cost of Defendants’ fraud to consumers and health insurers has been staggering, and leading industry experts predict widespread implications will stem from this case. The CPM team litigating this case (In re: Generic Digoxin and Doxycycline Antitrust Litigation, No. 16-md-2724-CMR) include Joseph W. Cotchett, Steven N. Williams, Adam J. Zapala, and Joyce Chang.