Yost Takes Action Against Generic Drug Manufacturers Who Conspired to Inflate, Manipulate Prices



(COLUMBUS, Ohio) – Ohio Attorney General Dave Yost has joined a coalition of 51 states and territories in filing a lawsuit involving a widespread conspiracy by drug manufacturers to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for generic topical drugs sold across the United States.

“Price-fixing unlawfully benefits the producer at the expense of the patient,” Yost said. “In the absence of competition in the drug market, folks who most need medicine bear the brunt of the cost.”

Participating pharmaceutical companies conceived and perpetrated a scheme that impacted virtually every federal, state and commercial payer, as well as every U.S. resident who was prescribed a generic topical drug during the relevant time period. Topical products include any drug that is administered by means of contact, most often with an external body surface, such as creams, gels, lotions, ointments, shampoos and solutions.

Filed in the U.S. District Court for the District of Connecticut, the complaint – the third in what has been referred to as possibly the largest domestic corporate cartel case in U.S. history – focuses on 80 topical generic drugs that account for billions of dollars of sales in the U.S. The complaint names 26 corporate defendants and 10 individual defendants. The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

The multistate investigation 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 was built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of more than 20 million documents and a phone records database containing millions of call detail records and contact information for more than 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 who documented his discussions during phone calls with competitors and internal company meetings during a period of several years.

Drug companies communicated directly, the complaint alleges, and entered into long-standing agreements to minimize competition and, in some cases, substantially raise prices on dozens of topical products. 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. Other generic manufacturers making up the remaining third of the market include Actavis, Mylan, Teva, G&W and Glenmark.

Yost joined the attorneys general of Alabama; Alaska; Arizona; Arkansas; Colorado; Connecticut; Delaware; District of Columbia; Florida; Georgia; Guam; Hawaii; Idaho; Illinois; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Minnesota; Mississippi; Missouri; Montana; Nebraska; Nevada; New Hampshire; New Jersey; New Mexico; New York; North Carolina; North Dakota; Northern Mariana Islands; 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.

Corporate Defendants

Sandoz, Inc.
Actavis Holdco U.S., Inc.
Actavis Elizabeth LLC
Actavis Pharma, Inc.
Amneal Pharmaceuticals, Inc.
Amneal Pharmaceuticals, LLC
Aurobindo Pharma USA, Inc.
Bausch Health Americas, Inc.
Bausch Health, US LLC
Fougera Pharmaceuticals, Inc.
G&W Laboratories, Inc.
Glenmark Pharmaceuticals Inc., USA
Greenstone LLC
Lannett Company, Inc.
Lupin Pharmaceuticals, Inc.
Mallinckrodt Inc.
Mallinckrodt plc
Mallinckrodt LLC
Mylan Inc.
Mylan Pharmaceuticals Inc.
Perrigo New York, Inc.
Pfizer, Inc.
Sun Pharmaceutical Industries, Inc.
Taro Pharmaceuticals USA, Inc.
Teligent, Inc.
Wockhardt USA, LLC

Individual Defendants

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

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.  

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 PerrigoNew York, Inc. from January 2013 through July 2016.

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.

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.

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

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. 

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.

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

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

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