Mylan, Other Generic Drug Makers Named in Antitrust Class Action

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An antirust class action has been filed against a host of generic drug manufacturers claiming the companies illegally conspired to artificially inflate the prices of pravastatin sodium tablets, which help lower cholesterol and reduce the risk of heart attack. Filed in Pennsylvania by an employee welfare benefits fund, the lawsuit says the plaintiff’s claims speak to a much broader conspiracy purported by the defendants to raise and fix the price of more than a dozen generic drugs.

The defendants named in court documents include:

• Actavis Holdco U.S., Inc.
• Apotex Corp.
• Dr. Reddy’s Laboratories, Inc.
• Glenmark Pharmaceuticals Inc, USA
• Lupin Pharmaceuticals, Inc.
• Mylan Pharmaceuticals Inc.
• Teva Pharmaceuticals USA, Inc.
• Zydus Pharmaceuticals (USA) Inc.

According to the suit, pravastatin recently underwent unprecedented price increases of between 300 and 600 percent depending on dosage strength. These price spikes, the lawsuit says, are the result of deliberately orchestrated, secret communications between the defendants.

One theory the suit puts forth with regard to why the defendants would want to charge more for an inexpensively produced generic like pravastatin is the inherent structure of the market for the drug. The lawsuit notes pravastatin requires special FDA and Abbreviated new Drug Application (ANDA) approval before hitting the market. Additionally, the market for pravastatin is described by the case as “inelastic,” meaning levels of supply and demand shift only slightly. Market inelasticity, combined with a high degree of commoditization, substantial manufacturer overlap and other factors, provide reason enough for the defendants to illegally work together, the suit alleges.