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20 states sue 6 makers of generic drugs, alleging conspiracies to manipulate prices

Six makers of generic drugs artificially inflated and manipulated prices to reduce competition for an antibiotic and oral diabetes medication, 20 state attorneys general said in a federal lawsuit filed Thursday.

Connecticut Atty. Gen. George Jepsen, whose office began its investigation more than two years ago into price increases of certain generic medications, said his staff "developed compelling evidence of collusion and anti-competitive conduct" among many companies that manufacture and market generic drugs.

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Jepsen called Heritage Pharmaceuticals "the principal architect of the conspiracies" but said he had evidence of "widespread participation in illegal conspiracies across the generic drug industry."

Federal authorities on Wednesday charged two former Heritage executives with fixing prices of generic drugs on an antibiotic and a diabetes medication between April 2013 and December 2015. Eatontown, N.J.-based Heritage said in a statement that it terminated those executives in August, has filed its own civil complaint against the two and is fully cooperating with the Justice Department.

A message was left seeking comment with Heritage concerning the 20-state lawsuit.

Besides Heritage, the other drug companies targeted in the lawsuit are Aurobindo Pharma USA Inc., Citron Pharma LLC, Mayne Pharma Inc., Mylan Pharmaceuticals Inc. and Teva Pharmaceuticals USA.

Mylan said it knew of no evidence that it had participated in price fixing. Aurobindo declined to comment. The other companies didn't immediately return requests for comment.

"Ultimately, it was consumers — and, indeed, our healthcare system as a whole — who paid for these actions through artificially high prices for generic drugs," Jepsen said.

According to the complaint, which was filed in federal court in Connecticut on Thursday, the defendants coordinated with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The 20 states also allege that the drug companies knew their conduct was illegal and avoided communicating with one another in writing.

Besides Connecticut, which is leading the effort, the other plaintiff states are 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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