Business ProfileforDr. Reddy's Laboratories

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the governments allegations, which have not yet been proven.

May 12, 2019 -   TRENTON – Attorney General Gurbir S. Grewal announced today that New Jersey and a coalition of 43 other States have filed a lawsuit accusing 20 generic drug companies of conspiring to artificially inflate the prices of over one hundred generic drugs, in violation of federal and state antitrust and consumer protection laws.

Filed in U.S. District Court in Connecticut, the complaint also names 16 individual defendants – drug company executives responsible for sales, marketing, pricing and operations -- and outlines their alleged involvement in “one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”

More than half of the corporate defendants are based in New Jersey, and five of the individual defendants reside in the State.

The complaint alleges that price-fixing by the defendants has caused significant financial damage to state health plans, taxpayer-funded federal healthcare programs like Medicare and Medicaid, employer-sponsored health plans, and individual consumers who pay out-of-pocket for their generic medications.

Drugs subject to the unlawful pricing manipulations included all classes of medication, including oral antibiotics, blood thinners, cancer drugs, contraceptives, anti-inflammatory drugs, statins, anti-depressants, medications used to treat HIV, blood pressure medications, and many more.

The complaint alleges that the collusive activity peaked between July 2013 and January 2015, when one of the participants in the alleged conspiracy, Teva Pharmaceuticals USA, Inc., is alleged to have significantly raised prices on about 387 formulations of 112 different generic drugs. The size of the alleged price increases varies, but a number of drugs saw their prices soar by “well over 1,000 percent.”

A cornerstone of the conspiracy, the complaint alleges, was an understanding among the defendant companies that they would cooperate on pricing so each company could maintain a “fair share” of the various generic drug markets. At the same time, the companies also colluded to “significantly raise prices on as many drugs as possible.”

The complaint alleges violations of the Sherman Act, a federal antitrust law, as well as violations of numerous state laws, including New Jersey’s Antitrust Act and Consumer Fraud Act.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

The lawsuit is the second stemming from a multi-state investigation led by the Connecticut Attorney General. The first lawsuit, which is still pending in U.S. District Court for the Eastern District of Pennsylvania, was filed in December 2016.  New Jersey joined that action, which now includes 18 corporate defendants, two individual defendants and 15 generic drugs, in early 2017.