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...

Follow me @glynmoody on Twitter, Diaspora, or Mastodon.

Filed Under: big pharma, drugs, generics, monopolies, patents, pharmaceuticals, price fixing, price inflation
Companies: mylan, novartis, pfizer, teva


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  • icon
    That One Guy (profile), 20 May 2019 @ 2:13am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      ldd (profile), 20 May 2019 @ 7:18am

      Re: Because screw everyone else when money's on the line

      Yeah, reading that line I also reacted with the thought "no, no, they have learned".

      The overarching thing they've learned is that despite the fines or settlements they periodically have to pay, the bottom line is that crime does pay.

      reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 20 May 2019 @ 3:43am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 20 May 2019 @ 4:02am

      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.

      reply to this | link to this | view in chronology ]

      • icon
        That Anonymous Coward (profile), 20 May 2019 @ 5:36pm

        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.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 5:27am

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 May 2019 @ 6:53am

        Re: Re:

        "consumer can not do price shopping "

        Are you suggesting that if only the consumer could price shop then everything would fix its self?

        Yeah, let's blame the victim as that always solves the problem and solves it in the most efficient ways - lol, not.

        reply to this | link to this | view in chronology ]

        • icon
          Anonymous Anonymous Coward (profile), 20 May 2019 @ 7:07am

          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.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 20 May 2019 @ 8:37am

            Re: Re: Re: Re:

            Rather than put the blame where it belongs, rampant corruption, it is suggested that the consumer needs to shop for the best price but is not allowed to do so.

            reply to this | link to this | view in chronology ]

            • icon
              Anonymous Anonymous Coward (profile), 20 May 2019 @ 8:46am

              Re: Re: Re: Re: Re:

              The problem is, how are you going to do that when your in an ambulance on your way to the nearest, not the cheapest, emergency room? In the current system, your insurance company might just deny the claim as that emergency room was 'out of network'.

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 20 May 2019 @ 10:40am

                Re: Re: Re: Re: Re: Re:

                Yup - and there are those contract medical people who are allowed to work in the hospital but are not part of the financial agreements which leads to you getting additional huge unexpected medical bills.

                reply to this | link to this | view in chronology ]

                • icon
                  lucidrenegade (profile), 20 May 2019 @ 11:38am

                  Re: Re: Re: Re: Re: Re: Re:

                  That shit should be illegal.

                  reply to this | link to this | view in chronology ]

                  • icon
                    Wendy Cockcroft (profile), 21 May 2019 @ 5:26am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Bu-b-but socialism!

                    Seriously, that's the tired old line that gets trotted out every time. Stop it, already. An American NHS is the only way forward; you can run private healthcare provision alongside it like we do over here in the UK.

                    reply to this | link to this | view in chronology ]

            • identicon
              TFG, 20 May 2019 @ 12:07pm

              Re: Re: Re: Re: 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.

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 20 May 2019 @ 12:49pm

                Re: Re: Re: Re: Re: Re:

                "The basic issue is that health-care is allowed to be a for-profit enterprise"

                And this seems to never be a topic of discussion.

                Where there is money to be taken from those least able to defend themselves, there is always a business model to take advantage. This is not sustainable.

                reply to this | link to this | view in chronology ]

            • icon
              That Anonymous Coward (profile), 20 May 2019 @ 5:49pm

              Re: Re: Re: Re: 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.

              reply to this | link to this | view in chronology ]

            • icon
              DNY (profile), 21 May 2019 @ 5:44am

              Re: Re: Re: Re: Re:

              Actually both the inability of consumers to compare prices and the ease with which rampant corruption have flourished in this sector are both due to the fact that there is no effective market in health care services or in health insurance, on which fact the first poster was laying the blame.

              reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 21 May 2019 @ 4:57am

          Re: Re: Re:

          No, I think he's saying that healthcare, by definition, cannot be a free market and therefore the economic norms that apply to other industries do not exist there.

          reply to this | link to this | view in chronology ]

          • icon
            Wendy Cockcroft (profile), 21 May 2019 @ 5:27am

            Re: Re: Re: Re:

            ^This. As a wise TD commenter once wrote, until you can choose which accidents and illness to suffer from, there will be no free market in healthcare.

            reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 20 May 2019 @ 4:32am

    out_of_the_blue's corporate heroes, ladies and gentlemen!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 May 2019 @ 6:49am

    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

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 7:34am

      Re:

      At the rices they are charging, if one person in several hundred, of those who need the drug, finds the money for the drug they still make more profit that selling at a reasonable price.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 11:43am

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 May 2019 @ 11:59am

        Re: Re:

        Your tin foil hat needs to be made from tin foil, and not that that cheap imposter, aluminium foil.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 May 2019 @ 6:03pm

          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.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 20 May 2019 @ 6:22pm

            Re: Re: Re: 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.

            reply to this | link to this | view in chronology ]

      • icon
        nasch (profile), 20 May 2019 @ 8:58pm

        Re: Re:

        reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 21 May 2019 @ 4:58am

      Re:

      "how do these geniuses intend to profit off their hugely inflated prices"

      Because when peoples' lives literally depend on the product, people will pay everything they have, and then some more on top.

      reply to this | link to this | view in chronology ]

  • identicon
    TruthHurts, 20 May 2019 @ 6:55am

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 8:41am

      Re: Novartis - Gleevec pricing victim here

      What happened to the laws about price gouging?

      reply to this | link to this | view in chronology ]

      • icon
        nasch (profile), 20 May 2019 @ 10:13am

        Re: Re: Novartis - Gleevec pricing victim here

        I believe price gouging laws are only for emergency situations. During normal times, drug companies can charge whatever they want. After all, if the customers don't like it, they can always choose to die.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 May 2019 @ 10:42am

          Re: Re: Re: Novartis - Gleevec pricing victim here

          Emergency is subjective. Normal times these are not.

          But yeah - you are correct I suppose.

          reply to this | link to this | view in chronology ]

    • icon
      DNY (profile), 21 May 2019 @ 5:51am

      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.

      reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 20 May 2019 @ 7:15am

    When your business model can literally be stated as "your money or your life," it's time to begin locking people up and filing criminal charges.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 May 2019 @ 9:04am

    It's almost as if the voters will never learn

    Congressmen & Congresswomen don't make the laws.
    Lobbyist paid Congressmen & Congresswomen make the laws.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 12:00pm

      Re: It's almost as if the voters will never learn

      No. Unelected lawyers in the doj make the law, micromanaging every aspect of life. Congress gave it up to them and now more than 500,000 laws repress our once great nation.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 May 2019 @ 12:51pm

        Re: Re: It's almost as if the voters will never learn

        "lawyers in the doj make the law"

        wrong

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 May 2019 @ 6:09pm

          Re: Re: Re: It's almost as if the voters will never learn

          More than 500,000 laws on the books have come from the judicial branch of government. Go research for. yourself before the government censors those records and destroy that data from online sources. This is factual.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 May 2019 @ 9:55am

    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...

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 May 2019 @ 11:13am

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

      5th rule...Don't be as blatant and as public as Martin Shrkeli

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 21 May 2019 @ 5:01am

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

        That only barely applies. Remember - he wasn't locked up for his drug pricing, he was jailed for defrauding rich people.

        reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 20 May 2019 @ 12:08pm

    Sure seems like a case of price fixing to me. Hope these assholes get dragged down for this shit.

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 20 May 2019 @ 2:52pm

    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..

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 20 May 2019 @ 2:58pm

      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..

      reply to this | link to this | view in chronology ]

  • icon
    Feldie47 (profile), 20 May 2019 @ 4:34pm

    Jail, Jail, Jail

    Would I love to see some of these characters sent away to Leavenworth. I think I'd actually vote for anyone who exhibited the fortitude to go after these crooks.

    reply to this | link to this | view in chronology ]

    • identicon
      Annonymouse, 21 May 2019 @ 5:45am

      Re: Jail, Jail, Jail

      Better yet send them to a Gulag for protective custody.

      Me I would have them billeted with a nice Mongolian family. The altitude and terrain would discourage running away and the neighbors have a proclivity for shooting down unauthorized helicopters and the like.

      reply to this | link to this | view in chronology ]


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