Ellison joins antitrust suit against makers of generic drugs

Citing “illegal behavior rooted in greed,” Attorney General Keith Ellison on Monday announced that Minnesota has joined 42 other states in suing 20 generic drug manufacturers, plus 15 people who work for them.

The 33-count, 510-page lawsuit charges illegal collusion to fix prices and divvy up market share for 112 prescription drugs used to treat cancer, diabetes, epilepsy and other conditions.  The companies called their agreement a “fair share” arrangement, according to the complaint.

Led by Teva Pharmaceuticals USA Inc., generics makers organized “an overarching conspiracy” to violate federal and state antitrust laws, Ellison said. In addition, they violated Minnesota’s Deceptive Trade Practices Act, he said.

“This ‘fair share’ understanding was not the result of independent decision making by individual companies to avoid competing with one another,” the complaint states. “Rather, it was a direct result of specific discussion, negotiation and collusion among industry participants over the course of many years.”

The companies’ anticompetitive behavior has increased cost burdens on patients, insurers and taxpayers, Ellison said.

“This is personal,” Ellison told reporters Monday. “It is hitting people where they live and we are here to do something about it.”

Pharmacy spending per enrollee in Minnesota’s Medicaid program rose more than 56 percent from 2012 to 2016, Ellison said. Between mid-2013 to mid-2014, prices of more than 1,200 generic medications increased by an average of 400 percent, he said.

The suit seeks both financial damages and injunctive relief, Ellison said. It also asks the court to force companies to surrender any profits gained through illegal behavior.

Ellison also said that besides colluding amongst themselves, there is evidence that generics companies communicated with major brand-name pharmaceuticals during the scheme. Discovery likely will reveal more details of such behavior, he said.

The lawsuit unveiled Monday is in addition to a similar December 2016 lawsuit, in which Minnesota also is a plaintiff.

That suit says that 16 other generics manufacturers conspired to illegally fix prices and allocate markets. At that time, Assistant Connecticut Attorney General Joseph Nielsen called that operation “most likely the largest cartel in the history of the United States.”

“[This] cartel is much bigger,” Ellison said of Monday’s suit.