Connecticut's Attorney General William Tong is leading the charge in a multi-state lawsuit against the manufacturers of some generic drugs.
Tong stated in the lawsuit that patients overpaid by tens of billions of dollars for dozens of common skin creams and shampoos.
"Competitors were talking to each other in real-time; exchanging information on prices so that they could artificially inflate prices," says Tong.
One of the cases involved Desonide, a popular lotion for eczema. The lawsuit claims generic drug makers conspired to raise the drug's price by 90% in 2009 and then 200% in 2011.
"The greater barriers to entry generally associated with topical products limit the number of competitors in any particular topical product market, creating an environment that is ripe for collusion. Many topical products have only two or three competitors. As a result, the sales and pricing executives at these companies know each other well and have used those business and personal relationships as a means to collude to limit competition, allocate customers, and significantly raise prices on dozens of generic topical products," the civil action notice reads.
In all, patients allegedly overpaid for at least 80 skin treatments. According to the lawsuit, dozens of drug makers had a "fair share" agreement where they each carved out equal segments of the market so they could all raise prices at the same time.
One sales executive allegedly warned his sales team, "Don't rock the boat - greedy hogs go to slaughter."
"We've got a number of cooperating witnesses; insiders who are telling us the truth, which that there is a widespread conspiracy to fix prices in what I believe is the largest corporate cartel in history," says Tong.
Tong says company insiders turned over books with information about private meetings. He says it was all designed to make you pay a lot more for generic drugs.
Tong says pharmacies and taxpayers were on the hook, too.
One of the defendants in the case, Taro Pharmaceuticals, responded by saying "Taro Pharmaceuticals is committed to the highest level of ethics and integrity in every aspect of our operations. We are aware of the recent filing and will respond when required. We maintain that the allegations made in this lawsuit are without merit, and we will continue to vigorously defend against them."
Sandoz, another defendant in the case, released a statement which read in part, "Sandoz disagrees with the extremely broad claims brought by the States in this case. The individual instances of misconduct at the core of the resolution we reached with the U.S. Department of Justice in March do not support the vast, systemic conspiracy the States allege. We take seriously our compliance with antitrust laws, and we will continue to defend ourselves in this matter."
The Association for Accessible Medicines released a statement about the suit which read in part, "The Association for Accessible Medicines is committed to supporting policies that promote competition and help speed the availability of generic and biosimilar medicines to patients. AAM is fully committed to compliance with all laws and to maintaining high ethical standards in the way we do business. Illegal behavior, such as price-fixing or other violations of antitrust law, is inconsistent with AAM's rules and procedures. We seek to maintain the highest ethical standards as we work to bring medicine to patients in the U.S."
The 45-state suit also includes United States territories, Puerto Rico, Guam, and the U.S. Virgin Islands. Connecticut has already filed 2 other lawsuits against generic drug makers for alleged price-fixing.