44 US states accuse drug firms of inflating prices 1,000%, Latest Business News - The New Paper

44 US states accuse drug firms of inflating prices 1,000%

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44 US states claim Teva Pharmaceuticals orchestrated price-fixing scheme

WASHINGTON Medicine prices were sometimes inflated by more than 1,000 per cent.

That is one of the allegations made by 44 US states against 20 US drug companies.

The US states filed a lawsuit accusing Teva Pharmaceuticals USA of orchestrating a sweeping scheme with 19 other drug companies to inflate drug prices and stifle competition for generic drugs, state prosecutors said on Saturday.

Soaring drug prices from both branded and generic manufacturers have sparked outrage and investigations in the US.

The criticism has come from across the political spectrum, from US President Donald Trump, a Republican, to progressive Democrats including US Senator Elizabeth Warren, who is running for president.

The 20 drug companies engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them, according to the complaint, filed on Friday in the US District Court in Connecticut.

A representative of Teva USA, a unit of Israeli company Teva Pharmaceutical Industries, said it will fight the lawsuit.

"The allegations in this new complaint, and in the litigation more generally, are just that - allegations," it said in a statement.

"Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability."

The 500-page lawsuit accuses the generic drug industry, which mainly sells medicines that are off patent and should be less expensive, of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a "fair share".

The situation worsened in 2012, the complaint said.

"Apparently unsatisfied with the status quo of 'fair share' and the mere avoidance of price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the US," the complaint said.

With Teva at the centre of the conspiracy, the drug companies colluded to significantly raise prices on 86 medicines between July 2013 and January 2015, the complaint said.

The drugs included everything from tablets and capsules to creams and ointments to treat conditions including diabetes, high cholesterol, high blood pressure, cancer, epilepsy and more, they said.

In some instances, the coordinated price increases were more than 1,000 per cent, the lawsuit said. - REUTERS