Arizona Joins Lawsuit Against Generic Drug Manufacturers, Senior Executives

Arizona has joined over 40 other states in filing an antitrust lawsuit against Teva Pharmaceuticals and some of the nation’s largest generic drug manufacturers, accusing them of conspiring to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for more than 100 different generic drugs.

The federal lawsuit also names 15 senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing, and operations:

Ara Aprahamian, David Berthold, James (Jim) Brown, Maureen Cavanaugh, Tracy Sullivan Divalerio, Marc Falkin, James (Jim) Grauso, Kevin Green, Armando Kellum, Jill Nailor, James (Jim) Nesta, Nisha Patel, Konstantin Ostaficiuk, David Rekenthaler, Richard (Rick) Rogerson

According to the Arizona Attorney General’s Office, the drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who paid artificially-inflated prices for their prescription drugs.

The complaint alleges that Teva, Sandoz, Mylan, Pfizer, and 16 other generic drug manufacturers engaged in a broad, coordinated, and systematic campaign to conspire with each other to fix prices, allocate markets, and rig bids for more than 100 different generic drugs. In some instances, the coordinated price increases for a particular drug were over 1,000 percent.

The complaint describes how the defendants unlawfully discouraged competition, raised prices, and enforced an ingrained culture of collusion. The complaint alleges that the conspiracy was conducted through an interconnected web of industry executives, who conspired with each other during industry dinners, “girls nights out,” lunches, cocktail parties, and golf outings. The complaint also cites to thousands of competitor communications via telephone calls, emails, and text messages that allegedly sowed the seeds for their illegal agreements.

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