Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Drug wholesaler alleges generic price fixing conspiracy, (Jun 29, 2016)

By Greg Hammond, J.D.

Various pharmaceutical companies conspired to fix the prices of generic doxycycline and generic digoxin, causing purchasers to pay supracompetitive prices, in violation of Section 1 of the Sherman Act, according to a complaint filed by drug wholesaler César Castillo Inc. in the federal district court in Philadelphia (César Castillo Inc. v. Allergan Plc, June 27, 2016).

Doxycycline is a broad-spectrum antibiotic and Digoxin is a medication prescribed to treat atrial fibrillation and other cardiac ailments. The complaint asserts that generic versions of both drugs had relatively low prices, but the price of doxycycline increased more than 8,000 percent after October 2012 and the price of digoxin increased more than 800 percent after October 2013. The price hikes, according to the plaintiff César Castillo Inc., were the product of the defendant pharmaceutical companies’ conspiracy to fix, raise, maintain, and stabilize the prices of, as well as allocate customers and markets for, these products.

The conspiracy was purportedly orchestrated through earnings calls with industry analysts and other private and public communications and meetings, such as Generic Pharmaceutical Association meetings. The generic doxycycline and digoxin markets were ripe for collusion, according to César Castillo, given the number of competitors and the high barriers to entry. As a result of the alleged conspiracy, direct purchasers have paid and continue to pay supracompetitive prices, the complaint asserts.

César Castillo seeks to represent a class of all persons or entities that directly purchased generic digoxin and/or generic doxycycline from defendants in the United States and its territories and possessions at any time during the period October 1, 2012, until the anticompetitive effects of defendants’ conduct cease.

The complaint alleges that the pharmaceutical companies—including Allergan plc, Impax Laboratories, Inc., Lannett Company, Inc., Mylan Inc., Mylan Pharmaceuticals Inc., Par Pharmaceutical Companies Inc., Sun Pharmaceutical Industries, Inc., and West-Ward Pharmaceuticals Corp.—violated Section 1 of the Sherman Act by entering into agreements with one another on the pricing of generic digoxin and generic doxycycline in the United States. The conspiracy was alleged to constitute per se unlawful price fixing, or alternatively, an unlawful restraint of trade under the rule of reason.

César Castillo seeks permanent injunctive relief that prohibits the pharmaceutical company defendants from violating the antitrust laws and requires them to take affirmative steps to dissipate the effects of their violations; a judgment against the defendants for damages sustained by César Castillo and the class, in addition to additional damages, penalties, and monetary relief, including treble damages; pre- and post-judgment interest; and costs and attorney fees.

The case is No. 2:16-cv-03525-CMR.

Attorneys: Linda Nussbaum (Nussbaum Law Group, P.C.) for César Castillo Inc.

Companies: César Castillo Inc.

News: Antitrust PennsylvaniaNews