Heritage among those facing lawsuit filed by 20 AGs

By Noell Wolfgram Evans | Jan 17, 2017

NEW HAVEN, Conn. (Legal Newsline) – The attorneys general of 20 states filed a lawsuit against Heritage Pharmaceuticals Inc., Auribindo Pharma USA Inc., Citron Pharma LLC, Mayne Pharma (USA) Inc., Mylan Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc. on Dec. 15, 2016.

The lawsuit alleges that the companies colluded on trade, prices and competition, particularly in regards to the drugs doxycycline hyclate delayed release and glyburide. These are generic drugs that are an antibiotic and diabetes medication, respectively.

A Dec. 14 statement was released by Heritage Pharmaceuticals Inc. and reads: “In August 2016, following an internal investigation that revealed a variety of serious misconduct by the individuals charged today, Heritage Pharmaceuticals terminated them. We are fully cooperating with all aspects of the Department of Justice’s continuing investigation. Recently Heritage initiated its own legal action against these same individuals to seek redress for an elaborate embezzlement and self-dealing scheme. We are deeply disappointed by the misconduct and are committed to ensuring it does not happen again.”

The lawsuit alleges that the companies violated the federal Sherman Antitrust Act, which was enacted in 1890. The intent of that law is to prohibit the creation of corporate trusts which would, in turn, foster more competition in the marketplace.

The lawsuit filed by the states follows a lawsuit filed on Dec. 14 in federal court in Philadelphia against two former Heritage employees - Jeffrey Glazer, former CEO, and Jason Malek, former president - for alleged price fixing. The two were fired from Heritage in August 2016. Heritage has also filed a racketeering lawsuit against the two.

The motives behind the actions being alleged in these suits have even been taken up by the U.S. Senate. Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) initiated a probe into the costs and availability of generic medications.

“Pharmaceutical executives must be held accountable for ripping off the American people by charging them the highest prices in the world for prescription drugs," Sanders said in a statement. "At a time when one out of five Americans cannot afford the medication they need, we must do everything we can to end the greed and illegal behavior of the drug makers. Fraud can no longer be an acceptable business model for the pharmaceutical industry.”

States involved in the lawsuit, which was filed in the U.S. District Court for the District of Connecticut, are Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia and Washington.

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U.S. Department of Justice U.S. District Court for the District of Connecticut

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