PHOENIX – On Wednesday, a coalition of attorneys general, including Arizona Attorney General Mark Brnovich filed the third lawsuit stemming from the ongoing antitrust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for generic drugs sold across the United States.
This new Complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States.
“These major pharmaceutical companies colluded to disrupt the free market, and consumers paid the price.” – Florida Attorney General Ashley Moody
The lawsuit targets Taro Pharmaceuticals, Perrigo New York, Fougera Pharmaceuticals (now Sandoz) and 23 more of the nation’s largest generic drug manufacturers.
The federal lawsuit also names 10 senior executive defendants who were responsible for sales, marketing, pricing, and operations:
- Ara Aprahamian, the Vice President of Sales and Marketing at Defendant Taro Pharmaceuticals U.S.A, Inc.
- Mitchell Blashinsky, the Vice President of Marketing for Generics at Defendant Taro Pharmaceuticals USA, Inc. from January 2007 through May 2012, and Vice President of Sales and Marketing at Defendant Glenmark Pharmaceuticals Inc., USA from June 2012 through March 2014.
- Douglas Boothe, the Chief Executive Officer of Defendant Actavis from August 2008 through December 2012 and the Executive Vice President and General Manager of Defendant Perrigo New York, Inc. from January 2013 through July 2016.
- James Grauso, the former Vice President of Sales and Marketing at Defendant G&W Laboratories from January 2010 through December 2011; the Senior Vice President, Commercial Operations for Defendant Aurobindo from December 2011 through January 2014; and the Executive Vice President, N.A. Commercial Operations at Defendant Glenmark from February 2014 to the present.
- Walt Kaczmarek, the Senior Director, National Accounts, Vice President, National Accounts and Senior Vice President, Commercial Operations from November 2004 through November 2012 for Fougera Pharmaceuticals, a division of Nycomed US, Inc. (currently part of Defendant Sandoz, Inc.), and Vice President – General Manager, and President, Multi-Source Pharmaceuticals from November 2013 through August 2016 for Defendant Mallinckrodt.
- Armando Kellum, the former Vice President, Contracting and Business Analytics at Sandoz.
- Kurt Orlofski, the President and Chief Executive Officer from April 2007 through August 2009 for Defendant Wockhardt USA, and President of Defendant G&W Labs, Inc. from September 2009 through December 2016.
- Mike Perfetto, the Vice President of Sales and Marketing for Defendant Actavis from August 2003 through January 2013, and the Chief Commercial Officer for Defendant Taro from January 2013 through his recent retirement from the company.
- Erika Vogel-Baylor, the former Vice President for Sales and Marketing for Defendant G&W Labs, Inc. since July 2011.
- John Wesolowski, the Senior Vice President of Commercial Operations for Defendant Perrigo since February 2004.
“Countless Arizonans improve their quality of life and treat illnesses and various conditions with generic medications every single day,” said Attorney General Mark Brnovich in a press release. “Too many Americans are already paying absurdly high and inflated prices for the medicines they need. This broad coalition of attorneys general are working together to ensure powerful drug manufacturers and their executives are held accountable if collusion and conspiracy have driven up consumer prices even more.”
The complaint describes how the defendants engaged in a scheme to raise dermatological generic drug prices and, through the clear understanding in the industry, communicated with competitors through text messages, emails, telephone calls, and at industry events to coordinate increasing drug prices and maintaining the status quo through reduced competition.
Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the United States. The multi-state investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. The complaint alleges longstanding agreements among manufacturers to ensure a “fair share” of the market for each competitor, and to prevent “price erosion” due to competition
The topical drugs at the center of the complaint include creams, gels, lotions, ointments, shampoos, and solutions used to treat a variety of skin conditions, pain, and allergies:
| 1. Acetazolamide Tablets 2. Adapalene Cream 3. Alclometasone Dipropionate Cream 4. Alclometasone Dipropionate Ointment 5. Ammonium Lactate Cream 6. Ammonium Lactate Lotion 7. Betamethasone Dipropionate Cream 8. Betamethasone Dipropionate Lotion 9. Betamethasone Valerate Cream 10. Betamethasone Valerate Lotion 11. Betamethasone Valerate Ointment 12. Bromocriptine Mesylate Tablets 13. Calcipotriene Solution 14. Calcipotriene Betamethasone Dipropionate Ointment 15. Carbamazepine ER Tablets 16. Cefpodoxime Proxetil Oral Suspension 17. Cefpodoxime Proxetil Tablets 18. Ciclopirox Cream 19. Ciclopirox Shampoo 20. Ciclopirox Solution |
21. Clindamycin Phosphate Cream 22. Clindamycin Phosphate Gel 23. Clindamycin Phosphate Lotion 24. Clindamycin Phosphate Solution 25. Clobetasol Propionate Cream 26. Clobetasol Propionate Emollient Cream 27. Clobetasol Propionate Gel 28. Clobetasol Propionate Ointment 29. Clobetasol Propionate Solution 30. Clotrimazole 1% Cream 31. Clotrimazole Betamethasone Dipropionate Cream 32. Clotrimazole Betamethasone Dipropionate Lotion 33. Desonide Cream 34. Desonide Lotion 35. Desonide Ointment 36. Desoximetasone Ointment 37. Econazole Nitrate Cream 38. Eplerenone Tablets 39. Erythromycin Base/Ethyl Alcohol Solution 40. Ethambutol HCL Tablets |
32. Fluocinolone Acetonide Cream 42. Fluocinolone Acetonide Ointment 43. Fluocinonide .1% Cream 44. Fluocinonide Gel 45. Fluocinonide Ointment 46. Fluocinonide Solution 47. Fluticasone Propionate Lotion 48. Griseofulvin Microsize Tablets 49. Halobetasol Propionate Cream 50. Halobetasol Propionate Ointment 51. Hydrocortisone Acetate Suppositories 52. Hydrocortisone Valerate Cream 53. Imiquimod Cream 54. Ketoconazole Cream 55. Latanoprost Drops 56. Lidocaine Ointment 57. Methazolamide Tablets 58. Methylphenidate HCL Tablets 59. Methylphenidate HCL ER Tablets 60. Metronidazole Cream |
42. Metronidazole .75% Gel 62. Metronidazole .1% Gel 63. Metronidazole Lotion 64. Mometasone Furoate Cream 65. Mometasone Furoate Ointment 66. Mometasone Furoate Solution 67. Nafcillin Sodium Injectable Vials 68. Nystatin Ointment 69. Nystatin Triamcinolone Cream 70. Nystatin Triamcinolone Ointment 71. Oxacillin Sodium Injectable Vials 72. Phenytoin Sodium ER Capsules 73. Pioglitazone HCL Metformin HCL Tablets 74. Prochlorperazine Maleate Suppositories 75. Promethazine HCL Suppositories 76. Tacrolimus Ointment 77. Terconazole Cream 78. Triamcinolone Acetonide Cream 79. Triamcinolone Acetonide Ointment 80. Triamcinolone Acetonide Paste |
According to the attorneys general, these medications account for billions of dollars of sales in the United States. Through alleged collusion, the defendants were able to increase prices affecting the health insurance market, taxpayer-funded programs like Medicare and Medicaid, and the cost to consumers. In some instances, the cost of a medication doubled, tripled, or even increased by more than 1,000 percent.
“These major pharmaceutical companies colluded to disrupt the free market, and consumers paid the price,” Florida Attorney General Ashley Moody stated.