Generic drugs ensnared in price-fixing and shoddy manufacturing claims

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Patrick Malone & Associates P.C. | DC Injury Lawyers

With Big Pharma pressing the limits in promoting and pricing prescription medications, patients and their advocates long have hoped that generic drugs might be difference-makers on costs and practices. Those positive wishes, however, may be dying out by the day.

The attorneys general of dozens of states have sued major generic makers including Teva, Pfizer, Novartis and Mylan, accusing them of conspiring to inflate generic drug prices by as much as 1,000%, the New York Times and other media organizations reported.

The makers’ price-fixing affected more than 100 generics, including “lamivudine-zidovudine, which treats H.I.V.; budesonide, an asthma medication; fenofibrate, which treats high cholesterol; amphetamine-dextroamphetamine for A.D.H.D.; oral antibiotics; blood thinners; cancer drugs; contraceptives; and antidepressants,” the New York Times said.

William Tong, a Democrat and Connecticut’s attorney general, told the Washington Post: “We have hard evidence that shows the generic drug industry perpetrated a multibillion-dollar fraud on the American people. We have emails, text messages, telephone records and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”

The attorneys general blamed market manipulations for keeping generics’ costs almost as sky-high as prices of “regular” prescription drugs. That’s just the opposite of what was supposed to happen. Proponents — including Scott Gottlieb, former commissioner of the federal Food and Drug Administration — theorized that generics could hold down or reduce Americans’ staggering medical bills because makers could bring these drugs to market cheaply. The intellectual property rights for generics have expired and makers typically don’t invest the billions of dollars that Big Pharma expends on research and development, branding, marketing, and advertising for non-generics. Generics, of course, have known ingredients and formulations, and they have been shown to be as effective whether branded or not.

But state officials have grown suspicious of what they viewed as cozy relationships among generic makers, arguing now that they agreed among themselves which products and markets each would take and push and what were acceptable market shares and prices. Lawsuits, limited in scope and launched in 2016 by states, since have exploded as evidence has emerged about generic makers and their practices. Grocers, for example, sued the makers over the asthma drug albuterol. It is a familiar medication long used to ease asthma symptoms. It is sold by Mylan and Sun. Its price skyrocketed recently to $4.70 a tablet from 13 cents not that long ago — a 3,400% increase that’s hard to explain or fathom, critics say.

And, even as legal authorities assail the costs and sales practices of generics, a prize-winning journalist has just published a scathing investigation of their quality and safety, a new book entitled, Bottle of Lies: The Inside Story of the Generic Drug Boom. Katherine Eban, a Fortune magazine contributor and Andrew Carnegie fellow, reports that “90% of our pharmaceutical market is comprised of generics, the majority of which are manufactured overseas.”

Her digging has found that generic plants overseas have weak and poor oversight, allowing them to turn out impure and risky drugs. As a New York Times reviewer wrote of her findings about the generics trade:

This booming industry, with most production coming out of lightly regulated plants in India and China, is pumping bad medicine into unsuspecting patients in every corner of the globe. [A] well-intentioned local action [launched by legendary Indian peace-maker Mahatma Gandhi to give the poor better access to costly Western drugs they otherwise would have been denied] became a hellish global fraud … an industry founded to counteract Big Pharma is now uneasily merging with it, creating a two-headed monster whose tentacles ensnare both hapless victims and would-be regulators.

Eban details how inept and impotent the FDA has been in its efforts to police generics and their manufacture outside of the United States, where regulators have been tricked, abused, and blocked but still have uncovered evidence of fraud, taint (including vermin infestations and flooding urine puddling in purportedly sterile areas), and drugs with toxic impurities.

In a New York Times Op-Ed, she described how overseas drug makers engage, too, in high-level and sophisticated deception about their products:

My reporting on the generic drug industry over the last decade led me to four continents, and into the overseas plants where America’s generic drugs are made. Interviews with more than 240 people, including numerous whistle-blowers, helped expose what was going on behind the boardroom doors at generic-drug companies. Some companies have encouraged data fraud as the most profitable path to securing approvals from regulators and have used deceit to hold the FDA’s investigators at bay.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them by defective and perilous products, notably dangerous drugs. Patients must go through ordeals these days to access and afford safe, efficient, and excellent medical care, especially because the costs, complexity, and uncertainty have gone through the roof for so many treatments and prescription drugs.

There’s nothing flashy, novel, or particularly complex about most generics, many of which patients rely on to deal with chronic and unspectacular conditions that benefit from regular use of inexpensive medications. But make them unaffordable, so patients skimp or skip on them — and that can be problematic to their health.

It’s good that the attorneys general are looking out for the public’s interests, it would be better, still, if Congress, the White House, and the FDA cracked down on drug pricing and availability with more action and less talk. Regulators, especially, deal with a medusa-like menace with Big Pharma, which, like Big Tobacco, is racing into social media to test the bounds of what markets will bear with costs and what the laws and professional codes allow with drug peddling. It sounds as if the FDA needs to bring aboard a slew of savvy millennials to try to keep up with party-throwing, Instagram-ing drug makers, using new media to sell to plastic surgeons and their patients yet another old tonic for youth, aka a Botox alternative.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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