DOJ Charges Another Generic Drug Company with Price Setting

Department of Justice (DOJ) recently charged Glenmark Pharmaceuticals Inc. for the it role in antitrust violations from May 2013 to December 2015.

The DOJ’s complaint alleged that the Pennsylvania-based pharmaceutical company and other generic drug companies, including a company within its own principal place of business and Apotex Corporation, agreed to increase and maintain prices of Pravastatin and several generic drugs.

Pravastatin is a prescription cholesterol medication to help prevent heart attacks and strokes. 

“By cheating through fixing prices, generic drug companies artificially raised prices even though prescription drug costs were already sky high,” Assistant Attorney General Makan Delrahim of the DOJ’s antitrust division, said in the release.  

“As today’s charge shows, the Antitrust Division will not hesitate to charge these companies, and litigate where necessary, particularly where their crimes resulted in hundreds of millions of dollars in overcharges for life-saving medications.”

Allegedly, the gain to the conspirators and the loss to the victims was nearly $200 million.

The charge holds a maximum penalty of $100 million. This may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million, DOJ said.

Glenmark is the fifth company to be charged over the last 13 months in connection with antitrust violations in the pharmaceutical industry. The previous charges were resolved by deferred prosecution agreement.  

So far, four senior executives have also been charged, with three entering a guilty plea and a fourth awaiting trial.

“During these difficult times, it is more important than ever that our pharmaceutical companies conduct business with the well-being of the consumer in mind,” said Steven Stuller, deputy special agent in charge, US Postal Service Office of Inspector General.  

“When generic drug companies conspire to artificially increase prices, they do so to the detriment of many who depend on these medications to maintain good health.  Along with the Department of Justice Antitrust Division and our partners at the Federal Bureau of Investigation, the USPS Office of Inspector General will remain committed to investigating those who would engage in this type of harmful conduct.”

FBI noted that it will continue to work with its partners to seek out those manipulating the economic system to their benefit. 

Jennifer Arbittier Williams, first assistant US attorney for the Eastern District of Pennsylvania said that the district will continue to hold accountable any company that is guilty in this ongoing investigation.

In mid-May, DOJ announced that Apotex agreed to pay $24.1 million criminal penalty for the role it played in antitrust violations. 

According to the one-count felony charge, the Florida-based pharmaceutical company and other generic drug companies, including Glenmark, agreed to raise and maintain the price of Pravastatin.

Apotex communicated with competitors about the price increase and refrained from submitting competitive bids to customers that previously purchased pravastatin from a competing company.  

Under the deferred prosecution agreement, the company agreed to pay the multi-million-dollar criminal penalty and cooperate fully with the Antitrust Division’s ongoing criminal investigation.  

The parties will file a joint motion, which is subject to approval by the court, to defer any prosecution and trial of the charges filed against the defendant for the term of the DPA.

“Now, more than ever, we recognize and appreciate the importance of life-saving medications,” Makan Delrahim, assistant attorney general of the Department of Justice Antitrust Division, said in the announcement. “When the makers of those medications conspire to raise prices for profit, the most vulnerable among us suffer.  That’s why we at the Antitrust Division are committed to pursuing the prosecution of antitrust crimes by the generic pharmaceutical industry.”