Utah Attorney General Sean D. Reyes announced today that he is joining a coalition comprising 50 states and territories to unveil two major cooperation agreements and settlements with Heritage Pharmaceuticals and Apotex, collectively amounting to $49.1 million. These companies have been accused of participating in extensive conspiracies designed to artificially inflate prices, stifle competition, and impose unreasonable restrictions on trade concerning a variety of generic prescription drugs. As part of the settlements, both companies have committed to cooperating in ongoing multistate litigations spearheaded by Connecticut against 30 corporate defendants and 25 individual executives, alongside implementing internal reforms aimed at promoting fair competition and ensuring compliance with antitrust laws.
Today, a motion for preliminary approval of the $10 million settlement with Heritage was submitted to the U.S. District Court for the District of Connecticut in Hartford. The $39.1 million settlement with Apotex is subject to obtaining signatures from all involved states and territories and will soon be finalized and filed in the U.S. District Court. These settlements come at a critical time as the states prepare for the inaugural trial set to take place in Hartford, Connecticut.
“The substantial evidence of illegal practices stems from an analysis of over 20 million documents, millions of call detail records, and contact details for more than 600 sales and pricing professionals within the generics industry,” Attorney General Reyes stated. “This settlement not only returns nearly $50 million to those who overpaid for medications but also enforces internal reforms to prevent future incidents of unfair competition and price gouging.”
Connecticut’s Assistant Attorney General Joseph Nielsen, who leads a coalition of nearly all states and territories, has been instrumental in filing three antitrust complaints since 2016. The first complaint involved Heritage along with 17 other corporate defendants and two individual defendants related to 15 different generic drugs. Since then, two former executives from Heritage, Jeffery Glazer and Jason Malek, have reached settlement agreements and are cooperating with the investigation. The second complaint, filed in 2019, targets Teva Pharmaceuticals along with 19 of the largest generic drug manufacturers in the U.S., naming 16 individual senior executives. The third complaint, which will be the first to go to trial, focuses on 80 topical generic drugs that represent billions of dollars in sales and includes 26 corporate and 10 individual defendants. Additionally, six more pharmaceutical executives have reached settlement agreements with the states and are assisting in bolstering the states’ claims across all three cases.
Each complaint highlights a different set of drugs and defendants, illustrating a complex network of industry executives who met frequently at industry events such as dinners, golf outings, and cocktail parties. Through these interactions, they facilitated illegal agreements that undermined competition. Terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” were commonly used among defendants to rationalize their tactics to raise prices and cultivate a culture of collusion. The evidence includes a two-volume notebook from a cooperating witness, detailing discussions with competitors and internal meetings over several years.
Joining Utah in this announcement are Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, the U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.
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