Allergan, Others Hit With Generic Drug Price-Fixing Suit

Six companies, including Allergan PLC, involved in the manufacture and distribution of generic versions of two drugs have been colluding to dramatically raise the prices of the drugs since at least 2013, according to a putative class action filed Monday in Pennsylvania federal court.

The drugmakers — which also include Impax Laboratories Inc., Mylan Pharmaceuticals Inc., Lannett Company Inc., West-Ward Pharmaceuticals Corp. and Par Pharmaceutical Companies Inc. — have pushed the price of digoxin, a heart drug, and doxycycline, an antibiotic, many times higher than what they once were, the plaintiff, Edward Carpinelli, said in his 86-page complaint.

Doxycycline — which is used to treat bacterial pneumonia, acne, chlamydia, cholera, syphilis and other diseases — skyrocketed in price between October 2013 and April 2014, increasing 8,281 percent from $20 to $1,849, according to information Carpinelli said was compiled by U.S. Rep. Elijah E. Cummings, D-Md., and U.S. Sen. Bernie Sanders, I-Vt.

Digoxin, which is used to treat mild to moderate heart failure in adults, improve heart functions for children with heart failure and treat other heart-related problems, increased in price by 884 percent from $0.11 to $1.10 during the same time period, Carpinelli said.

“Many patients with cardiovascular conditions need to take digoxin daily in order to survive. Likewise, people with serious infections or other life-threatening diseases need access to a ready, affordable supply of doxycycline,” Carpinelli said. “Many have limited ability to cope with these types of price hikes.”

His claims arise from what he calls a broad conspiracy among manufacturers of generics to fix prices in recent years — a scheme that he says appears to have been created by direct company-to-company contacts among generics manufacturers, as well as other activities. The price-fixing of digoxin and doxycycline are only two manifestations of that conspiracy, Carpinelli said.

Mergers and withdrawals from the market have also caused the number of competitors to shrink dramatically, he said.
The dramatic and unexplained price hikes have led to extensive scrutiny by Congress and by federal and state antitrust regulators, and related investigations have been spawned.

The U.S. Department of Justice opened a criminal investigation into the alleged conspiracy in 2014 and, in connection with that investigation, has issued grand jury subpoenas to some of the defendants in this case, Carpinelli said.

The DOJ investigation encompasses generics other than the two at issue in Carpinelli’s suit, but he said that as the scope of the agency’s work is further clarified, he may amend his complaint to add more parties and claims.

Carpinelli, a California resident who bought generic doxycycline, is seeking to represent a class comprising anyone in the U.S. who bought, paid for or provided reimbursement for some or all of the purchase price of the generic versions of the two drugs from Oct. 1, 2012, through the present.

In addition to the Sherman Act violations brought by the nationwide class, Carpinelli has also made state law antitrust, consumer protection and unjust enrichment claims on behalf of anyone who spent money on the drugs in 30 states and Washington, D.C.

The defendants could not be reached for comment Tuesday.

Carpinelli is represented by Gerald J. Rodos, Jeffrey B. Gittleman and Chad A. Carder of Barrack Rodos & Bacine, R. Alexander Saveri, Cadio Zirpoli and Travis L. Manfredi of Saveri & Saveri Inc., Randy Renick of Hadsell Stormer & Renick LLP, Robert J. Bonsignore, Lisa A. Sleboda and Wendy K. Angulo of Bonsignore Trial Lawyers PLLC, and Allan Steyer and D. Scott Macrae of Steyer Lowenthal Boodrookas Alvarez & Smith LLP.

Counsel information for the defendants was unavailable Tuesday.

The case is Carpinelli v. Lannett Company Inc. et al., case number 2:16-cv-01954, in the U.S. District Court for the Eastern District of Pennsylvania.

–Editing by Philip Shea.For a reprint of this article, please contact [email protected].

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