CBS News 60 Minutes newsmagazine broadcast a major story on Sunday night about a lawsuit brought by the State of Connecticut and forty other states against major generic drug makers, charging them with a conspiracy to price gouge and limit competition. The program said this may be the “biggest price fixing scheme in US history.” The Attorney General of Connecticut William Tong appeared on the program and noted the outrageous increases in drug prices. The broadcast reported:
Between 2013 and 2014, a bottle of doxycycline shot up 8,281 percent from $20 to more than $1800. A bottle of asthma medication, albuterol sulfate, jumped more than 4000 percent, from $11 to $434. Pravastatin, a cholesterol drug, up more than 500 percent, from $27 a bottle to $196.
The drug companies said that prices rose due to shortages and market forces. Attorney General Tong, said that the generic drug makers are “too big to care” about the impact of the drug increases. He showed how investigators had phone records showing how prices were driven up by several major generic drug companies within hours after their executives had phone conversations and told each other they were raising prices.
Tong said: “We have evidence, hard evidence, in the form of text messages, emails, documents, witnesses that demonstrate clearly that it wasn’t about product shortages. It was about profit. It was about cold, hard greed.”
The report also said, “It all snapped into sharp focus when he matched phone logs to thousands of text messages from Heritage Pharmaceuticals. This exchange, with competitor Citron Pharma, showed collusion to increase the price of a diabetes medication. The text messages implicate two other companies: Aurobindo and Teva, the world’s largest generic drug maker. The national accounts manager at Heritage wrote:
A.S.: “We are raising the price right now — just letting you know, Teva says they will follow”
A.S.: “Aurobindo agrees too”
A corporate account representative from Citron answered:
KA: “…we are def [initely] in to raise pricing … are doing this immediately”
The Heritage executive responded:
AS: “We are raising our customers 200% over current market price.”
A director of a health care clinic in a rural southern Illinois area said that Medicaid and Medicare cap what they pay for generic prices so patients have to pay the difference and are struggling to do so.
Here’s a link to the story: