2020-6-12

ATTORNEY GENERAL HERRING FILES WIDE-RANGING LAWSUIT AGAINST 26 DRUG MAKERS AND 10 EXECUTIVES FOR CONSPIRACY TO FIX PRICES ON MORE THAN 80 GENERIC DRUGS

~ This is the third lawsuit filed by Attorney General Herring in ongoing, expanding antitrust investigation of the generic drug industry ~

RICHMOND (June 10, 2020) – Attorney General Mark R. Herring today joined a coalition of 51 states in filing the third lawsuit stemming from an ongoing antitrust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for generic drugs sold across the United States. This new Complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States. The Complaint names 26 corporate Defendants and 10 individual Defendants. The lawsuit seeks disgorgement, civil penalties, and actions by the court to restore competition to the generic drug market.
 
The topical drugs at the center of the Complaint include creams, gels, lotions, ointments, shampoos, and solutions used to treat a variety of skin conditions, pain, and allergies.
 
“These drug companies chose profit over keeping people safe and healthy,” said Attorney General Mark Herring. “Too many Virginians know the struggle of paying incredibly high drug prices, and in many cases the generic alternative may not have offered a lower-cost alternative because of this alleged price fixing. Virginians should never have to choose between paying for critical medication or paying for food, rent or utilities because of artificially inflated prices. My colleagues and I will continue to combat illegal price fixing in the generic drug market and hold drug companies and decision makers accountable.”
 
The Complaint stems from an ongoing investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry. Among the records obtained by the states is a two-volume notebook containing the contemporaneous notes of one of the States’ cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.
 
Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the United States. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. The Complaint alleges longstanding agreements among manufacturers to ensure a “fair share” of the market for each competitor, and to prevent “price erosion” due to competition.
 
The Complaint is the third to be filed in an ongoing wide-ranging multistate antitrust investigation of the generic drug industry. The first Complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate Defendants, two individual Defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the attorneys general working group in that case. The second Complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. That Complaint names 16 individual senior executive Defendants. The States are currently preparing for trial on that Complaint.
 
Corporate Defendants in the current Complaint:
  1. Sandoz, Inc.
  2. Actavis Holdco U.S., Inc.
  3. Actavis Elizabeth LLC
  4. Actavis Pharma, Inc.
  5. Amneal Pharmaceuticals, Inc.
  6. Amneal Pharmaceuticals, LLC
  7. Aurobindo Pharma USA, Inc.
  8. Bausch Health Americas, Inc.
  9. Bausch Health, US LLC
  10. Fougera Pharmaceuticals, Inc.
  11. G&W Laboratories, Inc.
  12. Glenmark Pharmaceuticals Inc., USA
  13. Greenstone LLC
  14. Lannett Company, Inc.
  15. Lupin Pharmaceuticals, Inc.
  16. Mallinckrodt Inc.
  17. Mallinckrodt plc
  18. Mallinckrodt LLC
  19. Mylan Inc.
  20. Mylan Pharmaceuticals Inc.
  21. Perrigo New York, Inc.
  22. Pfizer, Inc.
  23. Sun Pharmaceutical Industries, Inc.
  24. Taro Pharmaceuticals USA, Inc.
  25. Teligent, Inc.
  26. Wockhardt USA, LLC
 
Individual Defendants:
  1. Ara Aprahamian, Vice President of Sales and Marketing at Defendant Taro Pharmaceuticals USA, Inc.
  2. Mitchell Blashinsky, Vice President of Marketing for Generics at Defendant Taro Pharmaceuticals USA, Inc. from January 2007 – May 2012, and Vice President of Sales and Marketing at Defendant Glenmark Pharmaceuticals, Inc., USA from June 2012 – March 2014
  3. Douglas Boothe, Chief Executive Officer of Defendant Actavis from August 2008 – December 2012 and Executive Vice President and General Manager of Defendant Perrigo New York, Inc. from January 2013 – July 2016
  4. James Grauso, former Vice President of Sales and Marketing at Defendant G&W Laboratories from January 2010 – December 2011; Senior Vice President of Commercial Operations for Defendant Aurobindo from December 2011 – January 2014; and Executive Vice President, N.A. Commercial Operations at Defendant Glenmark from February 2014 – present
  5. Walt Kaczmarek, Senior Director of National Accounts, Vice President of National Accounts, and Senior Vice President of commercial Operations for Fougera Pharmaceuticals, a division of Nycomed US, Inc. (currently part of Defendant Sandoz, Inc.) from November 2004 – November 2012 and Vice President – General Manager and President of Multi-Source Pharmaceuticals for Defendant Mallinckrodt from November 2013 – August 2016.
  6. Armando Kellum, former Vice President of Contracting and Business Analytics at Defendant Sandoz
  7. Kurt Orlofski, President and Chief Executive Officer for Defendant Wockhardt USA from April 2007 – August 2009 and President of Defendant G&W Labs, Inc. from September 2009 – December 2016.
  8. Mike Perfetto, Vice President of Sales and Marketing for Defendant Actavis from August 2003 – January 2013 and Chief Commercial Officer for Defendant Taro from January 2013 through his recent retirement from the company.
  9. Erika Vogel-Baylor, former Vice President of Sales and Marketing for Defendant G&W Labs, Inc. since July 2011
  10. John Wesolowski, Senior Vice President of Commercial Operations for Defendant Perrigo since February 2004
 
Drugs listed in the complaint as subject to price-fixing and market allocation agreements:
  1. Acetazolamide Tablets
  2. Adapalene Cream
  3. Alclometasone Dipropionate Cream
  4. Alclometasone Dipropionate Ointment
  5. Ammonium Lactate Cream
  6. Ammonium Lactate Lotion
  7. Betamethasone Dipropionate Cream
  8. Betamethasone Dipropionate Lotion
  9. Betamethasone Valerate Cream
  10. Betamethasone Valerate Lotion
  11. Betamethasone Valerate Ointment
  12. Bromocriptine Mesylate Tablets
  13. Calcipotriene Solution
  14. Calcipotriene Betamethasone Dipropionate Ointment
  15. Carbamazepine ER Tablets
  16. Cefpodoxime Proxetil Oral Suspension
  17. Cefpodoxime Proxetil Tablets
  18. Ciclopirox Cream
  19. Ciclopirox Shampoo
  20. Ciclopirox Solution
  21. Clindamycin Phosphate Cream
  22. Clindamycin Phosphate Gel
  23. Clindamycin Phosphate Lotion
  24. Clindamycin Phosphate Solution
  25. Clobetasol Propionate Cream
  26. Clobetasol Propionate Emollient Cream
  27. Clobetasol Propionate Gel
  28. Clobetasol Propionate Ointment
  29. Clobetasol Propionate Solution
  30. Clotrimazole 1% Cream
  31. Clotrimazole Betamethasone Dipropionate Cream
  32. Clotrimazole Betamethasone Dipropionate Lotion
  33. Desonide Cream
  34. Desonide Lotion
  35. Desonide Ointment
  36. Desoximetasone Ointment
  37. Econazole Nitrate Cream
  38. Eplerenone Tablets
  39. Erythromycin Base/Ethyl Alcohol Solution
  40. Ethambutol HCL Tablets
  41. Fluocinolone Acetonide Cream
  42. Fluocinolone Acetonide Ointment
  43. Fluocinonide .1% Cream
  44. Fluocinonide Gel 
  45. Fluocinonide Ointment 
  46. Fluocinonide Solution
  47. Fluticasone Propionate Lotion
  48. Griseofulvin Microsize Tablets
  49. Halobetasol Propionate Cream
  50. Halobetasol Propionate Ointment
  51. Hydrocortisone Acetate Suppositories
  52. Hydrocortisone Valerate Cream
  53. Imiquimod Cream
  54. Ketoconazole Cream
  55. Latanoprost Drops
  56. Lidocaine Ointment
  57. Methazolamide Tablets
  58. Methylphenidate HCL Tablets
  59. Methylphenidate HCL ER Tablets
  60. Metronidazole Cream
  61. Metronidazole .75% Gel
  62. Metronidazole .1% Gel
  63. Metronidazole Lotion
  64. Mometasone Furoate Cream
  65. Mometasone Furoate Ointment
  66. Mometasone Furoate Solution
  67. Nafcillin Sodium Injectable Vials
  68. Nystatin Ointment
  69. Nystatin Triamcinolone Cream
  70. Nystatin Triamcinolone Ointment
  71. Oxacillin Sodium Injectable Vials
  72. Phenytoin Sodium ER Capsules
  73. Pioglitazone HCL Metformin HCL Tablets
  74. Prochlorperazine Maleate Suppositories
  75. Promethazine HCL Suppositories
  76. Tacrolimus Ointment
  77. Terconazole Cream
  78. Triamcinolone Acetonide Cream
  79. Triamcinolone Acetonide Ointment
  80. Triamcinolone Acetonide Paste
 
Attorney General Herring joined the attorneys general of Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Territory of Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, U.S. Virgin Islands, Vermont, Washington, West Virginia and Wisconsin in filing the complaint. 

Governor Northam Announces $66.8 Million in Emergency Education Relief Funding

RICHMOND—Governor Ralph Northam today announced that Virginia schools will receive $66.8 million through the federal Governor’s Emergency Education Relief (GEER) Fund to expand distance learning opportunities, fund services for students disproportionately impacted by loss of class time, and provide financial assistance to higher education students and institutions impacted by the COVID-19 pandemic.

“This funding will help Virginia provide high-quality instruction and continue the delivery of services for K-12 and higher education students during the COVID-19 pandemic,” said Governor Northam. “We are prioritizing this federal assistance to help address learning gaps caused by school closures, expand and improve internet connectivity, increase access to robust distance learning programs, and help students in need of additional financial assistance complete their postsecondary education and training.”

The GEER Fund, which was authorized under the federal Coronavirus Aid, Recovery, and Economic Security (CARES) Act, gives states the flexibility determine how best to allocate the emergency assistance to meet their educational needs.

Governor Northam is distributing $43.4 in GEER funding for the following PreK-12 priorities:

  • $26.9 million to support short-term and long-term initiatives expanding high-speed internet access to all communities in the Commonwealth, including providing laptop computers and Mi-Fi devices for students without home internet access;
  • $10 million to expand early childhood education and child care programs in the Commonwealth, especially for children with academic and social-emotional needs;
  • $3.5 million to support the expansion of the Virtual Virginia online learning program to provide content for elementary and middle school students; allow teachers in all school divisions to use the platform to create, edit, and share content as well as provide personalized virtual instruction for all students; and expand the Virtual Virginia Professional Learning Network, in partnership with the Virginia Society for Technology, to ensure that educators and technology-support personnel have the capacity and skills to meet the demand for quality online learning; and
  • $3 million to cover unfunded costs for the continuation of school-based meals programs while schools remain closed, including hazard pay for school nutrition staff.
     

“These initiatives will support efforts of PreK-12 schools to mitigate the impact of COVID-19 on our most vulnerable students and increase the capacity of local divisions to continue instruction and critical support services during future emergencies,” said Secretary of Education Atif Qarni. “We will also allocate flexible funding to our institutions of higher education that will allow colleges and universities to address the unique needs of their students. We trust they will maintain a focus on equity by distributing funds and services to students who are facing monumental challenges due to the pandemic.”

Approximately $23.4 million—one third of GEER funds—will be distributed throughout Virginia’s higher education system, with $18.3 million allocated to public and private four-year institutions and Richard Bland College. Of this funding, $14.5 million will be allocated to four-year public institutions and Richard Bland College, and $3.8 million will be allocated to private, four-year Tuition Assistance Grant (TAG) eligible institutions. All of these institutions will use the one-time funding to address immediate student financial needs, cover health and safety costs associated with COVID-19, and support activities that make online learning more accessible and equitable.

GEER funds totaling $4.9 million will be distributed to the Virginia Community College System to support the following initiatives:

  • One-time funding to address immediate student financial needs;
  • Last-dollar scholarships for displaced adults who enroll in stackable credential programs leading to jobs in targeted industry sectors; and
  • Initiatives to extend internet access into parking lots on or adjacent to the 40 campuses to provide help connect students who do not have internet subscriptions at home.
     

The Governor will also distribute $175,000 of GEER funds among Virginia’s five higher education centers, which provide access to college degrees and job training for in-demand careers located in parts of the Commonwealth with fewer college and university resources. 

GEER funding has been made available in addition to $587.5 million allocated to the Commonwealth in May under the federal CARES Act. This included $238.6 million from the Elementary and Secondary School Education Relief (ESSER) Fund for K-12 activities. Additionally, the CARES Act provided $343.9 million for higher education through the Higher Education Emergency Relief Fund.

In addition to allocating funding directly to every local school division, the ESSER K-12 funding includes a $23.9 million state set aside to fund state-level initiatives. In Virginia, these funds will be used to meet the needs of schools in regard to special education, instruction and assessment, student social and emotional health, and COVID-19-related health and safety in school buildings and facilities.

More information on the ESSER state set aside funds will be made available through the Virginia Department of Education in the coming weeks. 

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