Suffolk lawsuit: Generic drugmakers conspired to inflate prices

Nearly four dozen generic drug manufacturers colluded in a wide-ranging antitrust conspiracy to eliminate marketplace competition and inflate prices for 130 medications used by Suffolk residents, employees and retirees, county officials said in a lawsuit filed in federal court.

The 46 drug manufacturers, according to the lawsuit filed in the Eastern District of New York, conspired during an 11-year period — from 2009 to 2020 — to artificially jack up drug prices, according to court papers filed late Thursday. 

The lawsuit alleges that as a result of the defendants' antitrust conspiracy, Suffolk spent an extraordinarily higher amount for generic drugs than it would have in a truly competitive marketplace. 

“Generic drugs were made available to provide patients a much cheaper alternative to named-brand medication, not for drug companies to use them as a way to bilk the taxpayers,” Suffolk County Executive Steve Bellone said. “These co-conspirators have hurt seniors, veterans, people with disabilities, and even parents struggling to pay for medication for their sick child.”

The county was illegally overcharged for 130 generic drugs, including medications to treat high blood pressure, bacterial infections, pneumonia, multiple sclerosis, glaucoma, epilepsy, rheumatoid arthritis and diabetes, as well as medications used as part of cancer treatments including brain cancer, officials said.

"By engaging in the Price-Fixing Conspiracy, Defendants reduced and/or eliminated competition between generic drug manufacturers and artificially inflated the prices of generic drugs, reducing the savings that consumers, other purchasers such as Plaintiff, taxpayers and the U.S. health care system in general would have benefited from if the generic drugs had been sold in a competitive marketplace," the lawsuit states.

The defendants include several well-known pharmaceutical companies, including Pfizer and Sandoz, as well as Teva, the world’s largest generic drug company, which is based in Israel but has subsidiaries in the United States. Also named as a defendant is Amneal Pharmaceuticals, which employs hundreds of workers at its warehouse and factory in South Yaphank.

Most of the companies named as defendants did not respond to requests for comment or could not be reached.

"Out of respect for the judicial process, we do not comment on matters of litigation," a spokesman for Apotex, one of the defendants in the Suffolk suit, said.

The drug companies entered illegal agreements to raise prices and at the same time divvy up shares of the market for specific generic drugs to certain manufacturers, according to the court papers. Some manufacturers agreed to refrain from entering the market or competing for customers for certain generic drugs, the lawsuit said. 

The lawsuit is the result of an investigation into price-fixing in the generic drug industry that was led by Connecticut Attorney General William Tong’s office. Fifty-one states and territories, including New York, have joined a lawsuit filed in June that accused the drug manufacturers of artificially inflating drug prices while reducing competition.

Some of the generic drug companies named in the Suffolk lawsuit are also under investigation by the U.S. Justice Department, which is conducting an ongoing investigation into price-fixing, bid-rigging and customer-allocation conspiracies. Four companies charged as a result of the federal probe that are also defendants in the Suffolk lawsuit — Sandoz, Rising Pharmaceuticals, Heritage and Apotex — agreed to pay $220 million in criminal penalties. 

Another defendant, Glenmark Pharmaceuticals, was charged with one count of conspiracy in restraint of trade by federal prosecutors in June.

Suffolk's lawsuit contends the county employs more than 8,700 employees and pays health care costs for them and retirees, and provides drugs for inmates in the jail system.

Regina Calcaterra, a former chief deputy to Bellone who is now an attorney in private practice who is serving as the county’s counsel in the generic drug lawsuit, said the lawsuit was an important tool for the county to claw back money illegally charged by the defendants. The lawsuit, Calcaterra said, will give Suffolk County “a voice at the table.” 

“Just because the state files a lawsuit doesn’t mean the money will go back to the county,” Calcaterra said. “Just because the state will get paid doesn’t mean the county will get paid.”