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Teva, Others Get Tight Deadline in Generic Drug Price-Fixing Case (1)

Oct. 24, 2019, 7:06 PMUpdated: Oct. 24, 2019, 8:15 PM

Some 20 generic drugmakers accused of price-fixing their products must complete discovery and submit all relevant documents to federal court by Dec. 20, according to a pretrial order filed Oct. 24 in the U.S. District Court for the Eastern District of Pennsylvania.

Judge Cynthia M. Rufe’s order has significantly moved up the civil case’s timeline, ramping up pressure on the defendants, which include Teva Pharmaceuticals, Mylan Pharmaceuticals, Inc., and Sandoz, among others.

The companies face a lawsuit brought by 44 states that alleges industry-wide coordination to inflate prices, divvy up markets, and block competition. Potentially huge damages are at stake for the generic drug industry.

“This order adds new, significant pressure on the defendants to produce documents by December of this year,” said Connecticut Attorney General William Tong, who is leading the multi-state effort. “You are going to see the pace pick up significantly from here.”

The order directs the defendant companies to preserve all internal communications that could be relevant to the case.

It also provides a timeline for depositions, which are slated to run from March 16, 2020, through Sept. 16, 2021.

The 524-page unredacted complaint against the drug companies offered insight into the companies’ alleged efforts to stymie lawmakers’ investigation of price increases in the generic drug industry—including details found in emails between company executives and attorneys.

In one 2014 email exchange, outside counsel for Heritage Pharmaceuticals coordinated with Teva and Mylan Pharmaceuticals, Inc., agreeing to respond to lawmakers’ inquiries with “polite f-u” letters, according to the complaint.

Since then, the Department of Justice has charged and reached a deferred prosecution agreement against Heritage. The company’s former CEO and its former president were also charged, and DOJ officials said in May that the agency has “ongoing parallel investigations” into the generics industry.

In the meantime, the states’ civil complaint includes a series of emails in which senior executives at Mylan and Sandoz Inc. communicated at least 21 times by phone as they allegedly split up the market so each company would get a roughly 50% share upon launch of their new generic blood pressure medications in 2012.

“Sometimes a little help from our competition is welcome,” wrote one executive.

“I guess this is what they call co-opetition,” wrote another.

In one email, a company executive instructed others to stop emailing on the topic of coordination, according to the complaint.

The case is: In Re: Generic Pharmaceuticals Pricing Antitrust Litigation, E.D. Pa., No. 2:16-md-02724, order 10/24/19.

(Adds comment from Connecticut AG Tong in fourth paragraph.)

To contact the reporter on this story: Valerie Bauman in Washington at vbauman@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Randy Kubetin at rkubetin@bloomberglaw.com

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