Generic Drug Companies Could Soon Face Criminal Price-Collusion Charges

Image courtesy of Mike Mozart

The pharmaceuticals industry has come under heavy scrutiny in recent years for soaring prices, though much of the attention has focused on name-brand drugs with no or minimal competition. However, multiple news reports now claim that some generic drug companies could soon face federal criminal charges over allegations that they colluded on price.

The Wall Street Journal reports that the Justice Department has sent subpoenas to several generic drugmakers — including Teva, and Mylan — as part of the government’s investigation into the possibility that competing pharmaceutical makers worked together to keep certain generic prices higher than they otherwise would be if they had competed openly.

While the above mentioned companies and others have acknowledged being part of the DOJ’s investigation, it’s not known which companies — if any — will ultimately face charges. However, both the Journal and Bloomberg note that prosecutors could bring criminal charges before the year is out.

Bloomberg’s report doesn’t name specific drugs, but says the two-year DOJ probe has looked around two dozen medications made by about a dozen different companies.

In related news, Sen. Bernie Sanders (VT) and Rep. Elijah Cummings (MD) jointly sent a letter [PDF] to Attorney General Loretta Lynch and Federal Trade Commission Chair Edith Ramirez, calling for these agencies to investigate the soaring costs of insulin for diabetes patients.

Though insulin was first introduced 95 years ago, the medication is still not available as a generic in the U.S. thanks to a process dubbed “evergreening,” which allows drugmakers to extend patents by making improvements to the medication.

In their letter, the lawmakers point to data that shows how four widely prescribed insulin products appear to have raised prices around the same time and at around the same rate.

Sanders and Cummings express concern that this data indicates “possible collusion” and have called on the FTC and DOJ to investigate.

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