Humana sues drugmakers alleging generic price-fixing scheme
- Health insurance giant Humana has added its own accusations to ongoing state and federal antitrust probes of the generic drug industry, claiming in a civil lawsuit that more than two dozen pharmaceutical companies colluded to fix prices.
- The company filed a 273-page racketeering suit on Aug. 3 in the U.S. District Court for the Eastern District of Pennsylvania against nearly 30 drug companies, including big names such as Teva, Novartis, Mylan and Actavis (now part of Allergan).
- The suit closely tracks active federal and state antitrust investigations, explicitly referencing them throughout. Humana's suit lists 16 generics that range from antifungals to antidepressants to cholesterol medication that it claims are part of the scheme.
This civil suit adds another dimension to the potential legal risks facing generic drug companies and their top executives.
Humana is seeking "to recover damages it incurred from egregious overcharges it paid for certain widely-used generic drugs," the lawsuit said, "arising from a far-reaching conspiracy among Defendants and others to blatantly fix the price of such drugs."
The company has spent more than $1.7 billion on the 16 listed drugs in the suit, according to Becker's Hospital Review.
By relying on the substance of state and federal investigations into price-fixing schemes for generic drugs, this suit could add more weight to those investigations.
Forty-seven state attorneys general along with Washington, D.C. and Puerto Rico have filed a civil enforcement action on price fixing that was broadened to include 15 drugs in an update filed June 18, 2018. It was originally filed in March 2017. Four of those 15 drugs are included in Humana's lawsuit (doxycycline, leflunomide, nystatin and verapamil).
Federal investigators have also been aggressively probing generic drugmakers over the last four years.
The Department of Justice opened a criminal collusion investigation in November 2014. Throughout 2015 and 2016, many drug companies disclosed in their SEC filings that they received DOJ grand jury subpoenas, including Teva, Mylan and Allergan.
The DOJ already has secured two guilty pleas. Two Heritage Pharmaceuticals executives, Jeffrey Glazer and Jason Malek, pled guilty to federal criminal charges on Jan. 9, 2017 in violating the antitrust Sherman Act.
By May 2017, Glazer and Malek entered into settlement and agreements with the multi-state lawsuit as well. They agreed to provide documents, testimony and depositions to help the investigation.
Humana's lawsuit cited these probes and reports together in painting a broader picture of collusion among drug companies to keep prices high.
The lawyer in charge of Humana's suit declined to comment on the pending litigation as a matter of policy.