Minnesota expands generic medicine price-fixing lawsuit

Twelve pharmaceutical companies were added Tuesday to a price-fixing lawsuit which alleges that a Minnesota salesperson arranged meetings where company reps could agree to inflate prices or avoid competition in certain regions of the country.

Minnesota Attorney General Lori Swanson announced the expansion of the suit, which she originally filed in 2016 along with her counterparts in 45 other states and the District of Columbia and Puerto Rico. The lawsuit alleges collusion that resulted in dramatic price increases for generic drugs, such as an arthritis medication that jumped from $32 in 2012 to $108 in 2016.

"At a time when many patients can't afford their prescriptions, these companies colluded to jack up the prices even higher," Swanson said.

Asked for comment, the Association for Accessible Medicines (AAM) — the trade group of the generic drug industry — pointed out that generics saved the U.S. health system $253 billion in 2016 by reducing use of more expensive brand name drugs.

"AAM is fully committed to compliance with all laws and ethical business practices," said Jeff Francer, the association's senior vice president and general counsel.

The pharmaceutical market already has incentives that promote higher prices, such as bonuses for distributors that go up when drug prices go up. But the lawsuit alleges additional practices that violate antitrust laws in Minnesota and other states, such as a drug company representative texting others to ask if they would raise their price if his company did it first.

"That's an absolute no-no," Swanson said, "and they were doing it in a brazen fashion."

Companies added to the lawsuit included Actavis, Ascend, Apotex, Dr. Reddy's Laboratories, Emcure, Glenmark, Lannett, Par Pharmaceutical, Sandoz, Sun Pharmaceuticals and Zydus. While less well-known than the big brand name manufacturers, they represent a substantial share of the generic drug market.

The original companies included Heritage Pharmaceuticals, which employed a salesperson in Minnesota who has been described as central to the case. She organized dinners and meetings in Minnesota for drug company representatives, who exchanged information about prices and business plans, the lawsuit contends.

Swanson cited industry studies showing that the cost of the 50 most popular generic medications increased more than 370 percent from 2010 to 2014. She said she hopes publicity from the lawsuit has already discouraged companies from colluding on prices and motivated insurance companies to get tougher in their negotiations with pharmaceutical representatives and protect their members.

"It's really the patients at the end of the line," she said, "who have no say in what their prices are going to be."

Jeremy Olson • 612-673-7744