Big Pharma Companies Accused Of Conspiring To Inflate Prices Of Over 100 Generic Drugs By Up To 1000%

from the whatever-happened-to-that-quid-pro-quo? dept

At the heart of patents lies a quid pro quo. In return for a time-limited, government-backed intellectual monopoly, companies place their inventions in the public domain after the patent has expired. The theory is that granting patents encourages innovation, although there is plenty of evidence that it doesn’t. In the world of drugs, this approach is supposed to allow other pharmaceutical companies to produce generics — low-cost versions of drugs — once they are off patent. People benefit because they can buy drugs at much cheaper prices than when they were still under patent.

But as Techdirt has reported, for many years, Big Pharma companies around the world have been trying to renege on that deal with society. One of the main ways is through “pay for delay” schemes. A drug company holding an expired patent buys off manufacturers of generics so that it can continue to enjoy monopoly pricing. A new lawsuit brought by 44 states suggests another way Big Pharma may have been cheating the public. It alleges that top pharmaceutical companies, including Teva, Pfizer, Novartis and Mylan, conspired to inflate the prices of over 100 generic drugs by as much as 1000%:

In court documents, the state prosecutors lay out a brazen price-fixing scheme involving more than a dozen generic drug companies and just as many executives responsible for sales, marketing and pricing. The complaint alleges that the conspirators knew their efforts to thwart competition were illegal and that they therefore avoided written records by coordinating instead at industry meals, parties, golf outings and other networking events.

The complaint alleges that there was an agreement to maintain artificially high prices. This was done collectively to ensure that all the companies involved retained a share of the market, but with enhanced profit margins. According to Reuters, Teva, which describes itself as “The World’s Generic Pharmaceuticals Leader”, said in a statement:

The allegations in this new complaint, and in the litigation more generally, are just that — allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.

By an interesting coincidence, back in 2015 Teva agreed to pay $1.2 billion to settle a lawsuit brought by the FTC against its subsidiary, Cephalon, over a “pay for delay” scheme to keep competitors from launching low-cost generic drugs. It’s almost as if the generics industry never learns…

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Companies: mylan, novartis, pfizer, teva

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Comments on “Big Pharma Companies Accused Of Conspiring To Inflate Prices Of Over 100 Generic Drugs By Up To 1000%”

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51 Comments
That One Guy (profile) says:

Because screw everyone else when money's on the line

It’s almost as if the generics industry never learns…

Not so, sounds like they learned quite well…

The complaint alleges that the conspirators knew their efforts to thwart competition were illegal and that they therefore avoided written records by coordinating instead at industry meals, parties, golf outings and other networking events.

… namely, ‘if you’re going to be a world-class asshole, try to avoid a paper trail.’

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

Beyond the ‘internal investigation’ that I would trust as far as I could throw their HQ, something else struck me about this statement of their’s in that it doesn’t actually seem to say that they didn’t engage in reprehensible behavior, merely that what they did do isn’t enough(according to them at least) to lead to civil or criminal charges.

It’s one thing so say ‘We didn’t do X’, another entirely to go with ‘What we did do isn’t illegal’, and if that’s not the intent they were going for they should probably fire whoever they’ve got doing PR, because they seem to be pretty damn bad about it.

That Anonymous Coward (profile) says:

Perhaps if the government stop believing the lies…
They think ‘Star Wars’ still hasn’t made a dollar, the blame piracy not accounting tricks.
They think insulin is gathered from the sex organs of flowers that only bloom under the full moon 1 time every 100 years & its not gouging.
They think adding some buffers so they can call it extended release is innovation worth patent extensions.

Some dude effectively rid of small pox, another got polio and made a buck. Every asshole since then has been making not just a buck but 1000 bucks.

Oooh research!!! Which seems to be focused on researching ways to make the advertising more effective at getting people to ‘talk to their doctors’ about the drug to get on the newer only slightly better drug with the 50x price hike.

I mean its not like a drug is available outside the US for $22 but in the US its $20000… oh wait.
But we have these awesome programs where if you can’t afford your medication the company might be able to help… they only reason they do this is good PR and probably because they get a nice tax write off.

The profiteering is obscene (even worse on the drugs developed with public funding) but what is more obscene is government unwilling to anger powerful donors as we literally have people dying b/c it was get evicted or buy insulin. Hell they still haven’t really done anything about the Oxy problems… I guess they just like the donations more than stopping deaths.

That One Guy (profile) says:

Re: Re:

I guess they just like the donations more than stopping deaths.

Of course, dead people don’t give them money, large companies do, and it’s not like anyone who matters(read: people who give them money) is dying. Not hard to figure out which should be given more priorities if you’re a sociopath and/or a politician.

That Anonymous Coward (profile) says:

Re: Re: Re:

Stop giving sociopaths a bad name!!!!!!!!!!
pouts in sociopath

The truly sick thing is they are killing the people who voted them into office & somehow their offspring keep voting for the party of we killed your elders so they can be kept safe from the other side that just wants to steal their stuff & give it to poor brown people.

Anonymous Coward says:

Re: Re:

The issues with drug companies, hospitals, doctors, and medical services are all but one aspect of a much bigger health care issue.

The basic problem is that the consumer can not do price shopping when services are needed in the same form as can be done for any other consumer product.

To evade this various insurance schemes have been tried such as individual insurance, company pay, and government pay. Each of these schemes has the same draw back in that the consumer does not pay for the service so has no interest in what the services cost.

All these schemes thus lead to one form or another of financial overcharging and/or consumer demand rationing which leads to excess profits by criminal means and very pissed off consumers due to either over charging or unavailability.

Anonymous Anonymous Coward (profile) says:

Re: Re: Re: Re:

Where did the commenter blame the victims? It sure looked to me like the comment was blaming the system. Now which parts of the system are actual causes rather than symptoms?

Profit certainly plays into the issues, but is it the influence of Wall Street with their demands for quarterly profit increases, even when the market doesn’t actually create a cause for increased profits? Or is it purely executive greed, that gets perpetuated as the executives turn over and increased competition for the title of highest paid executives gets tested?

Would removing profit from health care fix the problems? Possibly not, but controlling profit in the health care system might go a long way to mitigating issues like this. On the other hand, with what we know about fraud in the government controlled portions of the health care system, it won’t eliminate the issue entirely.

Now, if Big Pharma could come up with a pill that cures greed, with a one time dose that could only be sold for $1.00 over cost (that is one that doesn’t kill you)…well some dreams are actually fantasies.

TFG says:

Re: Re: Re:3 Re:

The basic issue is that health-care is allowed to be a for-profit enterprise, instead of a strictly non-profit public service. At least, that’s my view on it.

I’m sure there’s quite a few people who will disagree with me, but fair warning to them that they’ll need to debate with people who aren’t me.

That Anonymous Coward (profile) says:

Re: Re: Re:3 Re:

Shopping for the best price…

slaps you with an unreleased Wu Tang album

The system is rigged for the benefit of corporations, who paid a pittance to be given the right to tell patients all of the money or your life.

We can’t import drugs from other countries for ‘safety’, lets ignore these are the same factories that make the pills for US sale.
We give a benefit to companies willing to make ‘orphan’ drugs & then ignore the 3000% price hike.
We pay to develop drugs & then hand all of the profits to a corporation b/c they had to pay for ‘testing’… that is done in-house and sometimes is faked & kills people… they might get hit with a fine later as some states have actually passed laws to protect drug makers from lawsuits.

We live in the corporate states of america.
Look at the model & then note how many of our laws that are supposed to benefit us only benefits them.

We grant, for a limited time (HA!), the exclusive rights to the thing. At the end of that limited time, it enters the public.

IP is the drug of corporations.
We’ve given exclusive rights to cell companies, cable companies, phone companies, drug companies and more… and despite the fact each one of these sectors have fscked the public over & over we let them keep going.

Perhaps if we stopped giving power to leaders who are lining their pockets & just voted for anyone but incumbants until we put the fear of the people back into Government we could get better results, but as it stands now we vote for those swearing to protect us from the bad things, that they then inflict themselves if it makes them a buck.

Anonymous Coward says:

I do not understand their game plan here as one can not squeeze blood out of a turnip. With the continual decline of net disposable income, how do these geniuses intend to profit off their hugely inflated prices? Are they betting the government will start paying in order to keep the poor from dying early? With a declining birth rate (which is not a bad thing) and increasing reasons to not bear children (minimum wage is insufficient) what are the captains of industry going to do – increase H1Bs of course … because it is not their policies that are to blame, oh no

Anonymous Coward says:

Re: Re:

No doubt the government is paying for big pharma to kill off a HUGE PORTION of the population. Statin drugs are tools for those nefarious policy makers. Go study statin drugs origins from research in the 70s to pharma infiltrating government agencies in the 80s and 90s to medical students and professionals being taught pseudoscience to pharma lobbying government for legislation mandating forced prescriptions upon the middle aged population to what statins are actually doing to the human body and you will realize this is the biggest conspiracy in the history of human civilization.

Anonymous Coward says:

Re: Re: Re: Re:

Statin drugs destroy the mavelonate pathway between blood and cells. When the cells cannot replicate themselves because the dna can’t write the blueprint the cells rupture. They cannot replicate to renew such as the liver in seven years refreshes with all new cells and lungs in three years. Muscle, nerve, bone, gums, and braincells all die and your organs will die without renewal.

I don’t feel I should have to educate those who don’t have the sense or capability to educate and research for yourself. Put your own tin hat on and go lower your cholestoral their way then. Good luck with that.

Anonymous Coward says:

Re: Re: Re:2 Re:

I have statin drug induced diabetes. Statins took my pancreas and said, "Let’s Party." Now I am rapidly losing muscle and suffer from severe neuropathy in my feet. I studied hard and long what happened to me in seven short years. More than a thousand verifiable scientific studies have shown the facts of exactly what statin drugs do to the human body. From the very first experiments with the fungus toxins, it was known to stop the enzymes and proteins and nutrients from reaching the living cells. Stat means Stop. These people have known all along what they were doing. Genocide in a bottle. Genocide in a textbook. Its a very new world we are living in.

TruthHurts says:

Novartis - Gleevec pricing victim here

I watched the price of Gleevec, a chemo drug, go from 3700 for 30 day supply to over 7000.00 USD, rising faster the closer it came to their patent expiration. They also did the pay to not produce a generic route. India got so fed up that they invalidated the patent(s) in question to allow generics to be made within their borders.

DNY (profile) says:

Re: Novartis - Gleevec pricing victim here

We recognize that natural monopolies (utilities) must have their prices regulated because they are not subject to market competition, but do not regulate the prices charged under government-granted monopolies (patents) even in circumstances where what is being sold is literally a matter of life and death, there are no effective substitute products to provide market competition, and thus demand is highly inelastic. Enforce laws against conspiracy in restraint of trade, and offer Big Pharma the choice for each newly patented drug between very short price-unregulated patents (say 3 years), or patents of double the normal duration, but with prices regulated in the public interest, and most of the problem with the pharmaceutical aspect of health care will be fixed.

Anonymous Coward says:

It's almost as if the generics industry never learns...

What do you mean, they learned very well:

  1. First rule of Pharma club, is you don’t talk about Pharma club
  2. Second rule of Pharma club, you don’t write anything down
  3. Third rule of Pharma club, Jack your generic prices through the roof (around the same as competitors or brand names if possible).
  4. Kill patients who can’t afford coverage, and gloat about your "kill count" at the next Pharma club meeting.

Sure it could be cynicism, or it could be reality…

ECA (profile) says:

How many of us...

How many of us/you, Understood and knew this type of thing was happening Over the last 10-20-30-40+ years???
How many had an IDEA that something like this was/is happening??
How many of you/parents goto Mexico to get large bottles of Tylenol..
Jump the Border to Canada to save over 80% on drugs…
There is even Video’s of this happening, and Even restrictions at the Border on the MAX $$ you can spend on those drugs and bring back..

HOW can we protect Corps that BEND us over and PLOW straight into us, and FORCE us to pay Threw the weakest point of Excretion, the HARD worked for money we get.

I mentioned after a recent Operation, and seeing the bills…
That I could of gone to Vegas, had a 1 day most expensive Room in Town, in the Middle of Tourist season(summer) and paid LESS then the hospital bill, and I think My doctor would of liked it also..

ECA (profile) says:

Re: How many of us...

HOW about that 2-3 Corps OWN almost Every grocery store int he USA…
That the Major 3 Conglomerates, Are so diversified that they CANT loose money, unless they get REAL stupid and invest in Medical /insurance/Banking..(all controlled by other groups)
How about the Stock market taken control by the corps, Rather then the original idea that it was to stabilize Farmers profits?(after the 70’s the corps own most of the farms anyway)(most prices for crops is $0.03 per pound, add processing and handling make it $0.10 per pound for Fruits/veggies/corn/wheat) Everything above that is PROFIT..

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