The number of states accusing Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Mylan N.V. (NASDAQ:MYL) for price collusion have risen as the list now includes 20 more states. This became apparent following a press statement that was released by the attorney general of Connecticut, George Jepsen.
Previously, 20 states had filed a lawsuit against the two pharmaceutical firms which now brings the total number of states that are suing to 40.
Antitrust Laws At State And Federal Levels
In the lawsuit whose initial filing took place in 2016, the complaint alleges that antitrust laws were broken according to state laws as well as according to federal laws. Specifically, it is alleged that a generics firm, Heritage Pharmaceuticals, colluded on price over a diabetes drug, glyburide. The price fixing also extended to doxycycline hyclate and an antibiotic. In one case, they conspired to increase prices by 200%.
“Through its senior-most executives and salespersons, Heritage organized and initiated a wide-ranging scheme which included numerous generic drug manufacturers, all of whom were knowing and willing participants,” the Connecticut lawsuit reads.
Besides Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Mylan N.V. (NASDAQ:MYL), there were four other pharmaceutical firms that were enjoined in the lawsuit.
According to the lawsuit the defendants were in communication the whole time in their scheme to apportion to themselves market share. Additionally, the defendants offered cover bids to customers they had no interest in or even refused to participate in bids. Some of the places the executives of the aforementioned companies met to further their scheme included social joints, steakhouses and industry conferences.
Last year in mid-December, two executives who were formerly employees of Heritage Pharmaceuticals were charged in a court of law over the price fixing scheme. The two were Jason Malek, former president and Jeffrey Glazer, former chief executive officer. The charges brought against them included a conspiracy to rig bids, allocate customers and collude on prices in the period between April 2013 and December 2015. Prior to the charges, the investigation had been going on for two years.
On Wednesday, shares of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) fell by 0.03% to close the day at $35.01.
Note: This article is written by Andy Parker and originally published at Market Exclusive.