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While most eyes were fixed on the election last week, another decision also impacted Lunenburg County residents. Virginia Attorney General Jason Miyares was part of a 50-state coalition that reached a settlement with drug companies Heritage Pharmaceuticals and Apotex. The groups were accused of inflating and manipulating generic drug pricing, while reducing competition and restraining trade. 

As part of the deal, the companies agreed to pay $49.1 million. But beyond that, Lunenburg residents could see prices drop for certain drugs, while generic options for others might increase in the months to come. 

“These settlements only affect Virginia’s lawsuits against Heritage and Apotex related to price fixing, bid rigging, and market allocation, which are pending in the U.S. District Court for the District of Connecticut,” Shaun Kenney , director of communications for office of Virginia’s Attorney General Jason Miyares. “Virginia releases the claims against Apotex and Heritage in these suits in exchange for the relief in the settlement, which includes cooperation by each defendant.”

Kenney said this settlement has no effect on any other litigation involving these defendants.

As part of their settlement agreements, both companies have agreed to cooperate in the ongoing multi-state lawsuits against 30 corporate defendants and 25 individual executives, according to a statement from the attorney general’s office. Both companies have further agreed to a series of internal reforms to ensure fair competition and compliance with antitrust laws.

How will we see impact? 

Asked about how the settlements will benefit Charlotte County consumers, Kenney explained the complaints allege anticompetitive conduct in numerous generic drug markets.  

“Plaintiffs allege that one effect of this anticompetitive conduct was to increase prices for many generic drugs, including some manufactured by Heritage and Apotex,” he said. “Among other things, the settlements with Apotex and Heritage aim to restore competition to the generic drug markets by forbidding such anticompetitive conduct going forward, which should, all things being equal, drive prices down over time.”

A motion for preliminary approval of the $10 million settlement with Heritage was filed Oct. 31 in the United States District Court for the District of Connecticut in Hartford. A settlement with Apotex for $39.1 million is contingent upon obtaining signatures from all necessary states and territories and will be finalized and filed in the District of Connecticut in the near future.

As part of the settlement, consumers who purchased generics made by the two companies will have the chance to recoup some of what they overpaid.

“Consumers who purchased certain drugs manufactured by the defendants during the relevant time period will be included in the settlement and will receive reimbursement pursuant to a Plan of Allocation to be approved by the court,” Kenney explained. 

How does Miyares deal work? 

Those who have purchased a generic prescription drug from either of these two companies between 2010 and 2018 may be eligible for compensation. To determine your eligibility, the attorney general’s office said to call 1-866-290-0182, email info@AGGenericDrugs.com, or visit www.AGGenericDrugs.com.

“Virginia and the other plaintiff states will also receive reimbursement for costs and fees associated with bringing the lawsuit. Funds distributed to Virginia will be appropriated to the Virginia Treasury to be used as determined by the General Assembly,” Kenney said.

He explained that the funds distributed to Virginia will be used to support future antitrust and consumer protection enforcement actions and other purposes determined by the General Assembly.

Attorney General Miyares said the actions of these two generic drug manufacturers harmed consumers and compromised fair competition.

“Together, state attorneys general are holding these entities accountable and emphasizing the importance of complying with antitrust laws to promote a competitive marketplace, which benefits all consumers,” Miyares said. “We will continue to protect competitive markets for Virginians and ensure that all companies operate within the bounds of the law.”

As part of the settlement agreement, actions of the two companies will be monitored.

“The companies have agreed to internal monitoring and compliance programs that require training of employees on antitrust compliance and reporting actual or potential violations of the settlement agreement to the plaintiff states,” Kenney said.

 

Miyares case background

Connecticut’s Assistant Attorney General Joseph Nielsen is the lead attorney for a coalition of nearly all states and territories filing three antitrust complaints, starting first in 2016. 

The attorney general’s office stated the first complaint included Heritage and 17 other corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have since entered into settlement agreements and are cooperating. 

The second complaint was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. This complaint names 16 individual senior executive defendants. The third complaint, to be tried first, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States and names 26 corporate defendants and 10 individual defendants. 

Since all this went to court, six additional pharmaceutical executives have entered into settlement agreements with the states and have been cooperating to support the States’ claims in all three cases, according to the attorney general’s office.

The cases all stem from an 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, according to the attorney general’s office. The complaints lay out an interconnected web of industry executives where these competitors met with each other during industry dinners, “girls nights out,” lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements.

Throughout the complaints, the attorney general’s release stated that defendants use terms such as “fair share,” “playing nice in the sandbox” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion. 

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, according to Miyares’ office.