Generic Drugs

Division Update Spring 2020

The Division’s ongoing generic drug investigation targets price-fixing, bid-rigging, and customer-allocation conspiracies in one of the most important industries for the health and pocketbooks of American consumers. Indeed, nearly 90% of all prescriptions in the United States are filled with generic drugs. To date, the investigation has resulted in charges against four companies and four executives for schemes affecting critical drugs relied on by vulnerable and elderly American consumers to treat a range of diseases and chronic conditions such as high cholesterol, arthritis, hypertension, seizures, various skin conditions, and blood clots. Four companies have resolved charges by deferred prosecution agreements, which require an admission of guilt, a criminal penalty, and cooperation in the ongoing investigation. Collectively, the four companies have agreed to pay over $220 million in criminal penalties.

Most recently, in May 2020, Apotex Corp. resolved criminal charges for its role in a conspiracy to fix the price of pravastatin, a widely used cholesterol medication. Apotex entered into a deferred prosecution agreement (DPA), which requires the payment of a $24.1 million criminal penalty. In March 2020, Sandoz Inc., one of the largest U.S. generic drug manufacturers, resolved criminal charges for its role in four conspiracies to suppress and eliminate competition by allocating customers, rigging bids, and fixing prices of generic drugs. To resolve felony charges, Sandoz entered into a DPA, which requires payment of a $195 million criminal penalty. The $195 million criminal penalty is the highest fine or penalty imposed in an Antitrust Division prosecution of a purely domestic cartel.

Of the four executives, three have pleaded guilty and one was indicted. The three guilty pleas include a former senior Sandoz executive, who pleaded guilty to conspiring to allocate customers, rig bids, and fix prices for generic drugs. The former CEO and former president of Heritage Pharmaceuticals pleaded guilty to fixing the price of doxycycline hydrate, an antibiotic, and glyburide, a drug used to treat diabetes. In February 2020, a grand jury in Philadelphia indicted a former senior executive at a third company for his role in conspiracies to fix prices, rig bids, and allocate customers for generic drugs, and for making a false statement to federal agents.


Photo credit: Oleh_Kucheriavyi/iStock/Getty Images Plus


Updated June 23, 2020

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