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44 US States Sue Pharma Cos. For Inflating Drug Prices

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A coalition of 44 American states filed a lawsuit against the nation's 20 largest generic drug manufacturers alleging a conspiracy to artificially inflate the prices of common medicinal drugs, reduce competition, and unreasonably restrain trade for more than 100 different generic drugs.

The complaint alleges that Teva Pharmaceuticals , Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers conspired to fix prices, allocate markets and rig bids for more than 100 different generic drugs.

The lawsuit, which follows a five-year investigation, was filed by Connecticut Attorney General William Tong in U.S. District Court for the District of Connecticut.

It names 15 senior executives involved in the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.

In some instances, the coordinated price increases were over 1,000 percent.

The drugs span all types, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV and ADHD.

Attorney General William Tong said he has hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people.

"We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs," he said in a statement.

This scam points to why the US healthcare and specifically the prices for generic prescription drugs are so expensive, according to him.

The complaint is the second to be filed in an ongoing investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest cartel case in US history.

The first complaint, pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and included 18 corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals have entered into settlement agreements and are cooperating with the Attorneys General working group in that case.

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