Generic Drug Industry Rocked by Lawsuit Alleging Price-Fixing that Heaped Billions onto Patients...

Generic drug industry rocked by lawsuit alleging price-fixing that heaped billions onto patients, employers, taxpayers

Ben Elgin, Bloomberg July 31, 2019

Her patient's voice was panic-stricken, Emily Deans says, and her story was baffling.

"She said, 'I can't fill my prescription, it's too expensive,''' says Deans, a psychiatrist near Boston, recalling a conversation from about five years ago. A patient who suffered from severe obsessive-compulsive disorder called, upset that she could no longer afford her medication, a drug called clomipramine. The price of a month's supply had suddenly jumped from $16 to $348.

The increase appeared to defy logic. "This is crazy for a generic drug that's been around for decades," Deans says. Clomipramine was discovered 55 years ago; it was approved to treat OCD in 1989 and became available in cheap, generic form in 1996. Why the sudden price hike? A possible answer finally came this year.

In May, attorneys general in more than 40 states accused three pharmaceutical companies that make clomipramine - Taro Pharmaceuticals Industries, Mylan Pharmaceuticals and Novartis's generics arm, Sandoz - of conspiring to raise the drug's price in concert. The allegation is part of a sweeping lawsuit that names 20 generic drugmakers and subsidiaries in all, as well as 15 current and former industry executives. It says they communicated with one another to fix prices and divvy up customers for more than 100 drugs, treating a range of maladies from HIV to high blood pressure to fungal infections.

The companies, including those that make clomipramine, have denied the states' allegations. Nonetheless, the lawsuit, along with a similar one filed in 2016 and a federal investigation into price-fixing allegations, have rocked the generic drug industry, long regarded as consumers' haven from the spiraling prices of name-brand medicines.

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