Lawmakers urge DOJ to investigate generic drug makers

Lawsuit filed by a coalition of 44 states

By Wayne Drash, CNN
Joe Raedle/Getty Images

Two top lawmakers urged the US Department of Justice on Thursday to launch a criminal investigation into the nation's generic drug manufacturers to see whether their executives conspired to raise prices at the expense of the American public.

Rep. Elijah Cummings, chairman of the House Committee on Oversight and Reform, and Sen. Bernie Sanders, ranking member of the Senate Budget Committee, made the request in a letter to Attorney General William Barr and Assistant Attorney General Makan Delrahim.

"We urge the Department of Justice to investigate whether generic drug companies and executives violated criminal antitrust laws and ask that the Department of Justice pursue enforcement if warranted," the lawmakers said.

The news comes on the heels of a lawsuit filed last month by a coalition of 44 states, alleging that 20 major drug manufacturers conspired to artificially inflate and manipulate the prices of more than 100 generic drugs, with the companies making billions in the process.

Cummings and Sanders said they were particularly troubled by allegations raised in the lawsuit. "Executives at Teva Pharmaceuticals allegedly orchestrated a sophisticated scheme to collude surreptitiously with competitors, artificially inflate the prices of over a hundred generic drugs, and destroy evidence of criminal conduct," they wrote.

Teva, one of the largest makers of generics in the world, denied any wrongdoing and said it has been cooperating with the Department of Justice in its ongoing probe.

"As reported in our public filings for several years, there has already been an ongoing DOJ criminal and civil probe into allegations of price fixing in the generic pharmaceuticals market," Teva spokeswoman Kelley Dougherty said in a written statement. "Teva has been cooperating with these investigations and vigorously denies any of the alleged wrongdoing that has been circulated in the media."

Cummings and Sanders said it is time to hold executives accountable for their alleged actions, beyond civil court. The two lawmakers expressed outrage about allegations in the civil suit that their offices were deceived by generic drug makers during a 2014 investigation.

"It is sick and disgraceful that generic pharmaceutical executives, who should be making medicines affordable for the American people, were instead busy coordinating a cover-up scheme to hide the truth about their price-fixing conspiracy when we asked about their skyrocketing prices," Sanders said in a statement.

Sanders cited an unredacted email uncovered as part of the civil suit in which the drug makers referred to a plan to coordinate "polite f-u" letters to his and Cummings' offices regarding the 2014 investigation.

"In my view, their 'polite f-u' letters designed to obstruct our investigation were clearly illegal," Sanders said. "The Department of Justice must hold these bad actors accountable to the fullest extent of the law."

Cummings said he too was "troubled by the allegations that Teva and its peers conspired to inflate the prices of lifesaving generic drugs, and that they obstructed our investigation in the process."

"We cannot stand for this type of harm to the public or this interference with Congress' oversight responsibilities," he said in a statement. "We will take all appropriate actions to ensure that generic manufacturers are held accountable for misconduct."

The Association for Accessible Medicines, a trade group representing generic drug manufacturers, said it "believes in compliance with all competition and antitrust laws."

"We take all instances of illegal behavior seriously. Anyone convicted of violating these laws should be punished appropriately," the group said in a statement. "Vigorous, ethical competition is the foundation of the generic drug and biosimilar industry. Competition allows our companies to drive enormous savings and pass them on to patients, taxpayers and health care payors."

The civil suit alleges that Teva and 19 other generic drug manufacturers schemed to increase prices affecting Medicare and Medicaid, the health insurance market and individuals. The lawsuit also named 15 senior executive defendants responsible for sales, marketing, pricing and operations. The drug companies have denied allegations of wrongdoing.

The lawsuit specified one report found that prices of more than 1,200 generic medications increased an average of 448% between July 2013 and July 2014.

At the time of the filing, Connecticut Attorney General William Tong said the suit may be the largest cartel case in the history of the United States.

In Thursday's letter to the Department of Justice, Cummings and Sanders urged the agency to "prioritize criminal enforcement of federal antitrust laws against generic drug manufacturers." They asked to be briefed by the agency by June 21.

"We are concerned about the lack of enforcement, particularly given serious allegations of anticompetitive behavior by generic manufacturers," the lawmakers wrote. "Vigorous antitrust enforcement is vital to ensuring that millions of Americans can afford the medications they need."

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