CHARLESTON, W.Va. — West Virginia has joined another multistate lawsuit alleging a number of generic drug firms – including Mylan – conspired to minimize competition, divvy up markets and maintain high prices or inflate prices where prior competition had driven them down.

Patrick Morrisey

The suit was filed Friday in Connecticut federal district court. West Virginia Attorney General announced the suit Monday in a press release.

“The allegations that we have included in the complaint, when proven, are illegal and those who participated in this type of conspiracy must be held accountable,” Morrisey said. “Antitrust violations drive up prices for the consumer and, in this instance, it impacts those in desperate need of prescription drugs.”

The complaint is similar to another multistate suit in process in eastern Pennsylvania federal court. This one Targets different drugs and approaches the alleged conspiracies in a different way.

It names 20 companies and 14 individual executives, including Mylan’s Vice President of Sales Jim Nesta, as defendants.

All allegations described here are from the complaint.

Israel-based Teva – which made an unsuccessful attempt to buy Mylan in 2015 – is the primary defendant. As background, the complaint describes how the drug firms communicated regularly during corporate events and via phone calls, text messages and emails, to avoid competition and maintain prices by allotting “fair” share to companies for various drugs.

By 2012, Teva sought to go beyond fait share to raise prices on as many drugs as possible. “Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States.

“Teva selected a core group of competitors with which it already had very profitable collusive relationships – Teva referred to them as ‘High Quality’ competitors — and targeted drugs where they overlapped. Teva had understandings with its highest quality competitors to lead and follow each other’s price increases, and did so with great frequency and success, resulting in many billions of dollars of harm to the national economy over a period of several years.”

From July 2013 through January 2015, Teva raised the prices on 112 drugs, and colluded on 86 of them. According to one report, from July 2013 through July 2014, the prices of more than 1,200 generics rose and average 448%.

The suit fills 533 pages and goes into detail describing how Teva and various companies conspired to coordinate market share and prices for more than 40 drugs, and how companies conspired with each other where Teva didn’t offer a product.

Mylan’s alleged role is cited at various points throughout the complaint. For example, it spends 17 pages described Mylan working with Teva regarding a cholesterol drug and blood-pressure patch.

“Mylan was Teva’s highest-ranked competitor by ‘quality,” it says. “The relationship between these two competitors was longstanding, and deeply engrained.”

Nesta began at Mylan in 2000, the complaint says, and communicates regularly with his counterparts. From January 2011 through February 2016, he exchanged at least 5,293 phone calls with contacts at 12 of the defendant companies.

The complaint notes that this case began with an investigation launched by Connecticut in 2014. That investigation caused the defendants to exercise caution and slow price hikes. “This was not a coincidence. Generic drug manufacturers in the industry – including the defendants in this case – understood that they were under scrutiny and did not want to draw further attention to themselves.”

And while they communicated chiefly via means that couldn’t be traced, such as trade show meetings and golf outings, they sometimes had to communicate in writing. “The defendants were aware that their conduct was illegal. They all made consistent efforts to avoid communicating with each other in writing, or to delete written electronic communications after they were made. … This was part of a
consistent effort by these individuals, as well as individuals at other corporate defendants, to avoid putting incriminating information in writing, in order to evade detection.”

The suit calls on the court to order the defendants to stop this behavior, award disgorgement of “ill-gotten gain,” and to award damages and civil penalties.

Mylan did not respond to an offer for comment, and typically does not comment on litigation.

Teva said in an email exchange, “The allegations in this new complaint, and in the litigation more generally, are just that – allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability. Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable laws and regulations in doing so. We will continue to vigorously defend the Company.”

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