Why Are Health Care Costs so High? Teva, Pfizer, Novartis, and Mylan Inflated Generic Drug Prices Up to 1,000%, According to 44 State Prosecutors.
In the ever evolving exposure of unrestrained pharmaceutical corporate greed, Teva, Pfizer, Novartis, Mylan, and other generic drug makers conspired to inflate the prices of generic drugs by as much as 1,000 percent, according to the recent lawsuit filed by 44 states.
Yet, you wonder why health care is so expensive? And think these drug companies care about patients, don’t need government supervision or accountability, and shouldn’t have executives that go to jail? Until they are sent to jail and these brazen companies shuttered, this conduct will continue to be repeated as it has been for decades.
The industrywide price fixing scheme affected the prices of more than 100 generic drugs, according to the complaint, including lamivudine-zidovudine, which treats H.I.V.; budesonide, an asthma medication; fenofibrate, which treats high cholesterol; amphetamine-dextroamphetamine for A.D.H.D.; oral antibiotics; blood thinners; cancer drugs; contraceptives; and antidepressants.
“We all know that prescription drugs can be expensive,” Gurbir S. Grewal, the New Jersey Attorney General, said in a statement. “Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices.”
44 state prosecutors laid out the brazen price-fixing scheme involving more than a dozen generic drug companies and just as many high paid executives responsible for sales, marketing, and pricing. The conspirators knew their efforts to thwart competition were illegal and, therefore, avoided written records, documents, emails, and texts by instead meeting and scheming privately at industry dinners, parties, golf outings, and other networking events.
The bulk of this collusive activity occurred from July 2013 to January 2015, according to the complaint, when Teva raised prices on nearly 400 formulations of 112 generic drugs. The complaint alleges an agreement among competitors to cooperate on pricing so each company could maintain a “fair share” of the generic drug markets. At the same time, the companies colluded to raise prices on as many drugs as possible.
Teva Pharmaceuticals USA, based in Pennsylvania, was a leader of the conspiracy, but the conduct was “pervasive and industrywide.” “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.”
Teva denied the allegations. Of course, it did. “Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability,” the company said in a statement. When they ultimately payout hundreds of millions of dollars, they will continue to deny the allegations. Committing fraud and related penalties are the cost of doing business for greedy fraudsters.
Teva is one of the world’s largest manufacturers of generic medicines. In February 2018, it faced widespread criticism for charging $18,375.00 for a bottle of 100 pills for a rare medical condition known as Wilson disease. Mylan has also generated outrage for raising the price for a two-injection EpiPen set to over $600.00 from $100.00.
The lawsuit was filed in the Federal District Court in Connecticut, where the multistate investigation began. William Tong, the Connecticut Attorney General, said the organized effort to maximize profits was “a highly illegal violation of antitrust laws.”
Pfizer also denied wrongdoing. The company said that Greenstone, a Pfizer subsidiary that produces generic drugs, “has been a reliable and trusted supplier of affordable generic medicines for decades and intends to vigorously defend against these claims.” State prosecutors say the conspiracy has negatively affected the national economy while damaging state health plans and federal health care programs like Medicare and Medicaid.
Credits to Heather Murphy, Reporter, The New York Times, and Ramin Rahimian, Contributor, The New York Times.