Sanders, Cummings Respond to Big Pharma ‘F-U Letters’ With Demand For Investigation
“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.”
Sen. Bernie Sanders and Rep. Elijah Cummings sent a letter to the Department of Justice (DOJ) on Thursday urging action against generic drug manufacturers they believe engaged in a criminal price-fixing conspiracy. The letter comes as 44 states have filed a lawsuit against 20 major drug companies for what Connecticut Attorney General William Tong describes as “a multi-billion dollar fraud on the American people.”
“In response to our document and information requests, these companies gave excuses for raising prices—such as the costs of regulatory compliance, drug shortages, and user fees—that were at best, grossly misleading, and at worst, false statements to Congress,” Sanders and Cummings wrote. “For these reasons, we request that the Department of Justice open an investigation.”
Sanders and Cummings previously sought to investigate drug makers in 2014, when 1200 generics spiked on average 448% between July 2013 and July 2014. An unredacted email from the earlier inquiry showed drug makers coordinating “polite f-u” letters in response to the lawmaker’s 2014 probe.
“In my view, their ‘polite f-u’ letters designed to obstruct our investigation were clearly illegal,” Sanders said. “The Department of Justice must hold these bad actors accountable to the fullest extent of the law.”
The 44 state-coalition’s civil lawsuit alleges companies like Teva, Pfizer, Mylan and Novartis conspired in secret to hike prices for drugs bought by Medicare, Medicaid, individuals and the private health insurance market, vastly spiking the costs of American health care. The suit also specifies 15 senior executives involved in marketing and pricing the drugs, all of whom have denied the criminal allegations.
“Executives at Teva Pharmaceuticals allegedly orchestrated a sophisticated scheme to collude surreptitiously with competitors, artificially inflate the prices of over a hundred generic drugs, and destroy evidence of criminal conduct,” the lawmakers wrote.
In 2016, the Justice Department charged two executives of conspiring to “fix prices, rig bids and allocate customers for an antibiotic, doxycycline hyclate,” for the benefit of their company Heritage. Doxycycline hyclate increased from an average of $20 in October 2013 to an average of $1,849 in April 2014, an 8,281% spike over the course of 7 months.
Heritage later admitted to price-fixing a diabetes medication, for which it paid only $225,000 in criminal penalties and $7 million in a separate civil resolution. Sander and Cummings wrote the $225,000 penalty is “wholly insufficient to deter future criminal conduct by Heritage or other generic manufacturers.”
“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,” said Connecticut Attorney General William Tong. Tong, who is leading the coalition of 44 states in the civil lawsuit, said the investigation revealed “hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people.”