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AG Schmitt Joins Coalition Filing 3rd Complaint in Ongoing Antitrust Price-Fixing Investigation into Generic Drug Industry

Jun 10, 2020, 12:53 PM by AG Schmitt
Complaint Names 26 Corporate Defendants, 10 Individual Defendants in Conspiracy to Fix Prices and Allocate Markets for at least 83 Generic Topical Dermatological Drugs

Attorney General Eric Schmitt joined a coalition of 51 states, districts, and territories led by Connecticut, filing 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. 

“Missourians depend on generic drugs every single day to help treat a number of ailments and illnesses, from cancer to acne,” said Attorney General Schmitt, “Artificially inflating and manipulating prices hurts thousands of Missourians. My office will continue to work with other attorneys general to hold these pharmaceutical companies responsible.”

This new Complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 83 topical generic drugs that account for billions of dollars of sales in the United States. The Complaint names 26 corporate Defendants and 10 individual Defendants. The lawsuit seeks, among other things, disgorgement of ill-gotten gains, civil penalties, and actions by the court to restore competition to the generic drug market. 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.

The Complaint stems from an ongoing investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry. Among the records obtained by the States is a two-volume notebook containing the contemporaneous notes of one of the States’ cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years. 

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 multistate 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 Complaint is the third to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest domestic corporate cartel case in the history of the United States. The first Complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate Defendants, two individual Defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case. The second Complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The Complaint names 16 individual senior executive Defendants. The States are currently preparing for trial on that Complaint. 

The States’ newest Complaint brings claims against the following corporate Defendants: 

      1. Sandoz, Inc.
      2. Actavis Holdco U.S., Inc.
      3. Actavis Elizabeth LLC
      4. Actavis Pharma, Inc.
      5. Amneal Pharmaceuticals, Inc.
      6. Amneal Pharmaceuticals, LLC 
      7. Aurobindo Pharma USA, Inc.
      8. Bausch Health Americas, Inc.
      9. Bausch Health, US LLC
      10. Fougera Pharmaceuticals, Inc.
      11. G&W Laboratories, Inc.
      12. Glenmark Pharmaceuticals Inc., USA
      13. Greenstone LLC
      14. Lannett Company, Inc.
      15. Lupin Pharmaceuticals, Inc.
      16. Mallinckrodt Inc.
      17. Mallinckrodt plc
      18. Mallinckrodt LLC
      19. Mylan Inc.
      20. Mylan Pharmaceuticals Inc.
      21. Perrigo New York, Inc.
      22. Pfizer, Inc. 
      23. Sun Pharmaceutical Industries, Inc. 
      24. Taro Pharmaceuticals USA, Inc.
      25. Teligent, Inc.
      26. Wockhardt USA, LLC


In addition, the following individuals are named as Defendants for their role in the anticompetitive schemes: 

1. Ara Aprahamian, the Vice President of Sales and Marketing at Defendant Taro Pharmaceuticals U.S.A, Inc.

2. 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. 

3. 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.

4. 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.

5. 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.

6. Armando Kellum, the former Vice President, Contracting and Business Analytics at Sandoz.

7. 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.  

8. 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. 

9. Erika Vogel-Baylor, the former Vice President for Sales and Marketing for Defendant G&W Labs, Inc. since July 2011.

10. John Wesolowski, the Senior Vice President of Commercial Operations for Defendant Perrigo since February 2004.

The States’ newest Complaint alleges the defendants engaged in price-fixing and market allocation agreements on the following drugs: 

  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. Chlorpromazine HCL Tablets
  19. Cholestyramine (with Sugar) Powder
  20. Cholestyramine/Aspartame Powder
  21. Ciclopirox Cream
  22. Ciclopirox Shampoo
  23. Ciclopirox Solution
  24. Clindamycin Phosphate Cream
  25. Clindamycin Phosphate Gel
  26. Clindamycin Phosphate Lotion
  27. Clindamycin Phosphate Solution
  28. Clobetasol Propionate Cream
  29. Clobetasol Propionate Emollient Cream
  30. Clobetasol Propionate Gel
  31. Clobetasol Propionate Ointment
  32. Clobetasol Propionate Solution
  33. Clotrimazole 1% Cream
  34. Clotrimazole Betamethasone Dipropionate Cream
  35. Clotrimazole Betamethasone Dipropionate Lotion
  36. Desonide Cream
  37. Desonide Lotion
  38. Desonide Ointment
  39. Desoximetasone Ointment
  40. Econazole Nitrate Cream
  41. Eplerenone Tablets
  42. Erythromycin Base/Ethyl Alcohol Solution
  43. Ethambutol HCL Tablets
  44. Fluocinolone Acetonide Cream
  45. Fluocinolone Acetonide Ointment
  46. Fluocinonide .1% Cream
  47. Fluocinonide Gel  
  48. Fluocinonide Ointment  
  49. Fluocinonide Solution
  50. Fluticasone Propionate Lotion
  51. Griseofulvin Microsize Tablets
  52. Halobetasol Propionate Cream
  53. Halobetasol Propionate Ointment
  54. Hydrocortisone Acetate Suppositories
  55. Hydrocortisone Valerate Cream
  56. Imiquimod Cream
  57. Ketoconazole Cream
  58. Latanoprost Drops
  59. Lidocaine Ointment
  60. Methazolamide Tablets
  61. Methylphenidate HCL Tablets
  62. Methylphenidate HCL ER Tablets
  63. Metronidazole Cream
  64. Metronidazole .75% Gel
  65. Metronidazole .1% Gel
  66. Metronidazole Lotion
  67. Mometasone Furoate Cream
  68. Mometasone Furoate Ointment
  69. Mometasone Furoate Solution
  70. Nafcillin Sodium Injectable Vials
  71. Nystatin Ointment
  72. Nystatin Triamcinolone Cream
  73. Nystatin Triamcinolone Ointment
  74. Oxacillin Sodium Injectable Vials
  75. Phenytoin Sodium ER Capsules
  76. Pioglitazone HCL Metformin HCL Tablets
  77. Prochlorperazine Maleate Suppositories
  78. Promethazine HCL Suppositories
  79. Tacrolimus Ointment
  80. Terconazole Cream
  81. Triamcinolone Acetonide Cream
  82. Triamcinolone Acetonide Ointment
  83. Triamcinolone Acetonide Paste

Attorney General Schmitt joined the attorneys general of Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Territory of Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin in filing the complaint.