Generic survey for drug pricing extends to 300 drugs and 16 companies

Leaders of more than a dozen generic pharmaceutical companies had a form of shorthand to describe how they performed business, insider lingo worked out over beef dinners, cocktail receptions and golf rounds.

"The Sandbox", according to researchers, was the market for generic prescription drugs, all of which were expected to play well.

"Fair share" described to divide the sales path to ensure that each company still gains profits. "Trashing the Market" was used when a competitor ignored these unwritten rules and sold drugs at less than agreed price.

The terminology reflected more than just the clubhouse of a powerful industry, according to the authorities and more litigation. Officials from several states say that this practice was central to illegal price fixing schemes with massive proportions.

Lawsuits and related issues brought steam last month when a federal judge claimed that more than 1 million e-mails, cell phone texts and other documents cited as evidence could be shared among all plaintiffs.

Mylan's Chief Executive Officer Heather Bresch Mylan, who witnessed Capitol Hill in 2016, was in charge of public review for the company to increase the price of EpiPen by about 500 percent. (Pablo Martinez Monsivais / AP)

What started as a trial brought by states over just two drugs in 2016 has exploded into a survey of alleged pricing involving at least 16 companies and 300 drugs, Joseph Nielsen , an assistant lawyer and antitrust researcher in Connecticut who has been in charge of the probe, said in an interview. His comments in an interview with The Washington Post represent the first publication of the dramatically expanded scope of the survey.

The development case is rattling an industry portrayed in Washington as the white knight of American health care.

"This is probably the largest cartel in US history," said Nielsen. He quoted the volume of drugs in the scheme, that they took place on American soil and "total number of companies and individuals involved."

The victims were American healthcare and taxpayers, as the foot bills of overcharges on common antibiotics, blood pressure medications, arthritis treatments, anxiety pills and more, the authorities say. The costs went through the entire system, affecting hospitals, pharmacies and health insurance companies. They affect consumers who lack prescription drug coverage, and even those with insurance, because many plans have high deductions and lack of prescription drug movements.

In just one case of extraordinary costumes, the price of a decade old drug to ease asthma symptoms, albuterol, sold by generic manufacturers Mylan and Sun, jumped more than 3400 percent, from 13 cents a tablet to more than $ 4 , 70. The example is documented in a lawsuit brought against generic nutrition of grocery chains, including Kroger.

"Everybody pays the price," said Nielsen. He offered a simple word to explain the behavior: "Greed."

Although accurate estimates of alleged overloads have not been released, sales of generic industry were around $ 104 billion in 2017. Excessive billing of even a small fraction of annual revenue over several years would like billions of dollars in additional costs to consumers, according to scientists.

Generic manufacturers reject the charges. The prosecutor's officials lack proof of conspiracy and have failed to prove competition competition.

Among the 16 accused companies are some of the biggest names in generic production: Mylan, Teva and Dr. Reddy. Mylan denied misconduct in an email statement. Sun, Teva and Dr. Reddy did not respond to requests for comment. In a lawsuit, Teva said that a pricing conspiracy was "conclusive and without any facts."

But investigators say that they have accumulated a lot of it during sealing and not available to the public, showing industry to be riddled with pricing schemes. The plaintiffs now contain 47 states. Investigators expect to uncover new details and add more defendants in the coming months, which will put more pressure on managers to assess settlements.

Two former leaders of a company, Heritage Pharmaceuticals, have committed themselves to federal criminal prosecutions and cooperate with the Justice Department in a parallel criminal case. A spokesman for the Ministry of Justice refused to comment.

The alleged interaction transformed a cutting-edge, competitive business into a suddenly coordinated price tag on identical generic drugs becoming almost routine. Competitive executives were so shocking that they had an alphabetical rotation for who took up the tab on their regular dinners, according to a person familiar with the survey, who spoke on condition of anonymity because the case is still under review.

Annual trade conferences and "Girls Night Out" cocktail meetings were another great opportunity to exchange sensitive information about markets and prices, according to court documents.

"It's particularly ironic since the whole idea of ​​generic drugs was that we would get a lower price," said Henry Waxman, the Democratic former California Congressman who wrote in the 1984 Law to Establish Food and Drug Administration's rules for generics. "If generic versions are higher than need to be through rigged systems, submit the whole idea."

Generics accounts for 90 percent of the prescriptions written in the United States, but only 23 percent of the cost, according to the industry group, the Association for Available Medicines.

And generic drugs seem like a check on soaring drug letters driven by brand manufacturers. In Medicare prescription drug program, according to a government survey, prices for a reference set of older generic drugs were reduced by 14 percent between 2010 and 2015.

However, for some generic manufacturers, competition competition agreements ran prices on most, if not all, of the products they sold, according to the states.

Officials say they have documented price increases of up to 2000 percent. During 2013 and 2014, weakening generic prices arose confusion at pharmacies and among state and federal legislators. Independent pharmacists said they were afraid to learn from priced statements.

"There are old old medicines that have been around for a long time and suddenly the price has increased by hundreds of percent and we do not know why," said JD Fain, owner of Pieratt's Pharmacy in Giddings, Tex. , a small town one hour drive east of Austin.

Unlike the brand industry, which has years of patent exclusivity for new drugs, generic companies operate in a market that was designed to save consumers and taxpayers big sums through aggressive competition. When the FDA approves a generic product, the first company in the door receives six months with exclusive rights to market the drug. The price rebate from the brand product is relatively small, says 10 percent.

Prices rise as much as 50 percent once a second, entering the market, the FDA has estimated. And when six or seven generic companies compete for a particular substance, the price has fallen by 75 percent.

The Rigging market has hit that model up and down for some drugs, state employees say.

"It hurts me," says Eric Belldina, operator of pharmacies in Masontown and Morgantown in West Virginia. "Most people think when prices go up, it's because of a lack of raw ingredients, do not think the companies are settling down and says, "Hi, let's do this." "

The state lawsuit contains particular sharp claims against [19659033] Mylan and its president, Rajiv Malik, who was personally named as sued. Mylan met public review in 2016 to increase the price of EpiPen, to treat allergic reactions, at about 500 percent.

Although the EpiPen was not a generic product at that time, the screams of doctors, patient groups and members of the Congress took negative attention to the nest largest generic manufacturer.

While traveling in the UK in 2013, Malik took a phone call from a leader of a competing company, Heritage, states the states in their lawsuit. Heritage had won FDA approval to Promote a version of the antibiotic Doxycycline called Doxy DR, which is used to treat acne and a long list of infections.

It would put it in direct competition with Mylan for the sale of the drug. [19659038] During the transatlantic telephone conversation, Malik and Heritage Executive, Jeff Glazer, agreed to divide the sandbox, the US market for Doxy DR, according to state laws and similar complaints from independent pharmacies and grocery chains.

In subsequent talks, according to complainants, Mylan agreed not to sell Doxy DR to CVS and the wholesaler McKesson sales volume worth about 30 percent of the US drug market. As part of the alleged agreement, Heritage agreed to not set a low price.

Without a price reduction, US consumers ended the biggest losers in the deal.

Mylan said there was no evidence that its leaders did anything wrong. "We have investigated these allegations thoroughly and have not found any evidence of pricing from Mylans or its employees," the company said in a statement. "Mylan deeply believes in the integrity of his president, Rajiv Malik, and is fully behind him."

Heritage did not return repeated phone messages. Glazer and another heritage secretary, Jason Malek, blamed in 2017 for federal prosecutions to conspire to raise prices and choke competition. The terms of their care agreements say they cooperate with the criminal probe of a justice department.

A drug for the treatment of bone problems related to cancer, zoledronic acid, was the subject of another alleged pricing scheme, this time between legacy and Dr. Reddy's. Heritage became the first generic manufacturer of the drug in spring 2013, but Dr. Reddy was close behind. Leaders in the companies cut agreements, so each received a "fair share" of the market, while also conspiring to fix an inflated price, said the complaints.

Dr. Reddy s, who did not respond to requests for comments, ended with about 60 percent of the market, and inheritance claimed 40 percent, according to the state lawsuit.

Investigators cited evidence that leaders knew they act illegally. As discussions with Dr. Reddy took place, according to a complaint, a Heritage Executive sent a text message to their entire sales team and reminded them not to put their price talks with competitors in writing. "

Mystical price picks continue to roulate pharmacies and patient groups sometimes, although widespread price collaboration was reduced after the authorities have issued supranations in recent years, Michael Cole, a Connecticut assistant lawyer general actively involved in the case said. But many substances remain at artificially inflated price.

"There has not been recall in price increases," he said. "We are still paying."

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