Opposition Brief — Actavis Holdco U.S., Inc., et al., Petitioners v. Connecticut, et al.
Supreme Court briefMay 11, 2020
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No. 19-1010
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In The
Supreme Court of the United States
---------------------------------♦--------------------------------ACTAVIS HOLDCO US, INC., et al.,
Petitioners,
v.
STATE OF CONNECTICUT, et al.,
Respondents.
---------------------------------♦--------------------------------On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Third Circuit
---------------------------------♦--------------------------------RESPONDENTS’ APPENDIX TO
BRIEF IN OPPOSITION TO
PETITION FOR WRIT OF CERTIORARI
---------------------------------♦--------------------------------WILLIAM TONG
Attorney General of Connecticut
*CLARE KINDALL
Solicitor General
W. JOSEPH NIELSEN
ROBERT J. DEICHERT
Assistant Attorneys General
OFFICE OF THE ATTORNEY GENERAL
165 Capitol Avenue
Hartford, CT 06106
(860) 808-5261
Clare.Kindall@ct.gov
Counsel for State of Connecticut and
Liaison Counsel for Respondent States
*Counsel of Record
(Additional Counsel On Inside Cover And On Signature Pages)
================================================================================================================
ROBERTA D. LIEBENBERG
JEFFREY S. ISTVAN
FINE, KAPLAN AND BLACK, R.P.C.
One South Broad Street, 23rd Floor
Philadelphia, PA 19107
(215) 567-6565
rliebenberg@finekaplan.com
Lead Counsel for the End-Payer Plaintiffs
DIANNE M. NAST
NASTLAW LLC
1101 Market Street, Suite 2801
Philadelphia, PA 19107
(215) 923-9300
dnast@nastlaw.com
Lead Counsel for the Direct Purchaser Plaintiffs
JONATHAN W. CUNEO
CUNEO, GILBERT & LADUCA LLP
4725 Wisconsin Avenue, NW, Suite 200
Washington D.C. 20016
(202) 789-3960
jonc@cuneolaw.com
Lead Counsel for Indirect Reseller Plaintiffs
WILLIAM J. BLECHMAN
KENNY NACHWALTER P.A.
1441 Brickell Avenue, Suite 1100
Miami, FL 33131
(305) 373-1000
wblechman@knpa.com
Counsel for the Kroger Direct Action Plaintiffs
and Liaison Counsel for Direct Action Plaintiffs
Ai
APPENDIX TABLE OF CONTENTS
(1) List of Plaintiffs-Respondents ..........................A1
(2) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724, List
of Drugs at Issue ....................................................A5
(3) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Excerpts from States' Amended Complaint (E.D.
PA, doc. no. 106, October 31, 2019) .....................A10
(4) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724
Excerpts from Plaintiff States' Consolidated
Amended Complaint (E.D. PA, doc. no. 15, June 15,
2018) (unsealed version--previously sealed portions
reproduced in grayscale pursuant to district court's
order) ....................................................................A71
(5) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Pretrial Order No. 70 (E.D. PA, doc. no. 841,
January 31, 2019) ...............................................A92
(6) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Plaintiff States' Response & Objections to Special
Master David H. Marion's August 16, 2019 Report
and Recommended Order Setting Forth a Case
Management Order and Discovery Schedule (E.D.
PA, doc. no. 1086, September 13, 2019) ...........A103
Aii
(7) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Plaintiffs' Response to August 16, 2019 Report and
Recommended Order From Special Master David H.
Marion Setting Forth a Recommended Case
Management Order and Discovery Schedule
(E.D. PA, doc. no. 1092, September 13, 2019) ..A126
(8) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Excerpts from Transcript of Proceedings (E.D. PA,
doc. no. 1128, September 24, 2019) ...................A166
(9) In re: Generic Pharmaceuticals Pricing Antitrust
Litigation, MDL 2724, Docket no. 16-MD-2724,
Memorandum Opinion (E.D. PA, doc. no. 1191,
January 9, 2020) ................................................A197
A1
LIST OF PLAINTIFFS-RESPONDENTS
State Respondents
State of Connecticut
State of Alabama
State of Alaska
Territory of American Samoa
State of Arizona
State of Arkansas
State of California
State of Colorado
State of Delaware
District of Columbia
State of Florida
State of Georgia
Territory of Guam
State of Hawaii
State of Idaho
State of Illinois
State of Indiana
State of Iowa
State of Kansas
Commonwealth of Kentucky
State of Louisiana
State of Maine
State of Maryland
Commonwealth of Massachusetts
State of Michigan
State of Minnesota
State of Mississippi
State of Missouri
State of Montana
State of Nebraska
State of Nevada
State of New Hampshire
A2
State of New Jersey
State of New Mexico
State of New York
State of North Carolina
State of North Dakota
Commonwealth of the Northern Mariana Islands
State of Ohio
State of Oklahoma
State of Oregon
Commonwealth of Pennsylvania
Commonwealth of Puerto Rico
State of Rhode Island
State of South Carolina
State of South Dakota
State of Tennessee
State of Utah
State of Vermont
Commonwealth of Virginia
State of Washington
State of West Virginia
State of Wisconsin
State of Wyoming
Direct Purchaser Respondents (Named
Plaintiffs)
KPH Healthcare Services, Inc., a/k/a Kinney Drugs,
Inc.
FWK Holdings, LLC
Rochester Drug Co‐Operative, Inc.
César Castillo, Inc.
Ahold USA, Inc.
End-Payor Respondents (Named Plaintiffs):
1199SEIU Greater New York Benefit Fund
A3
1199SEIU Licensed Practical Nurses Welfare Fund
1199SEIU National Benefit Fund
1199SEIU National Benefit Fund for Home Care
Workers
American Federation of State, County and
Municipal Employees District Council 37
Health & Security Plan
American Federation of State, County and
Municipal Employees District Council 47
Health & Welfare Fund
City of Providence, Rhode Island
Detectives Endowment Association of the City of
New York
Nina Diamond
Hennepin County International Union of Operating
Engineers Local 30 Benefits Fund
Robby Johnson
Louisiana Health Service & Indemnity Company
d/b/a Blue Cross and Blue Shield of
Louisiana
Ottis McCrary
Philadelphia Federation of Teachers Health and
Welfare Fund
Self-Insured Schools of California
Sergeants Benevolent Association of the Police
Department of the City of New York Health
and Welfare Fund
David Sherman
UFCW Local 1500 Welfare Fund
Uniformed Fire Officers Association Family
Production Plan Local 854
Unite Here Health
United Food & Commercial Workers and
Employers Arizona Health & Welfare Trust
Valerie Velardi
A4
Indirect-Reseller Respondents (Named
Plaintiffs):
Mr. Russell’s Discount Drugs, Inc.
Falconer Pharmacy, Inc.
Reliable Pharmacy, Inc.
Chet Johnson Drug, Inc.
Halliday’s and Koivisto’s Pharmacy
Direct Action Respondents:
The Kroger Co.
Albertsons Companies, LLC
H.E. Butt Grocery Company L.P.
Humana, Inc.
United Healthcare Services, Inc.
A5
In re Generic Pharmaceuticals Pricing Antitrust Litigation
2:16-md-2724-CMR (MDL 2724)
List of Drugs at Issue
1. Acetazolamide
2. Acyclovir
3. Adapalene
4. Albuterol
5. Alclometasone Dipropionate
6. Allopurinol
7. Amantadine HCL
8. Amiloride HCL/HCTZ
9. Amitriptyline
10 Amoxicillin/Clavulanate
11. Amphetamine/Dextroamphetamine
12. Atenolol Chlorthalidone
13. Atropine Sulfate
14. Azithromycin
15. Baclofen
16. Balsalazide Disodium
17. Benazepril HCTZ
18. Betamethasone Dipropionate
19. Betamethasone Dipropionate Augmented
20. Betamethasone Dipropionate Clotrimazole
21. Betamethasone Valerate
22. Bethanechol Chloride
23. Bromocriptine Mesylate
24. Budesonide
25. Bumetanide
26. Buprenorphine
27. Buprenorphine Naloxone
28. Buspirone Hydrochloride
29. Butorphanol Tartrate
30. Cabergoline
31. Capecitabine
32. Captopril
33. Carbamazepine
34. Carisoprodol
35. Cefdinir
36. Cefprozil
37. Cefuroxime Axetil
38. Celecoxib
39. Cephalexin (Cefalexin)
A6
40. Chlorpromazine HCL
41. Cholestyramine
42. Ciclopirox
43. Cimetidine
44. Ciprofloxacin HCL Tablet
45. Clarithromycin
46. Clemastine Fumarate
47. Clindamycin Phosphate
48. Clobetasol
49. Clomipramine HCL
50. Clonidine TTS
51. Clotrimazole
52. Cyproheptadine HCL
53. Desmopressin Acetate
54. Desonide
55. Desogestrel and Ethinyl Estradiol [Kariva]
56. Dexmethylphenidate HCL [Focalin]
57. Dextroamphetamine Sulfate (“Dex Sulfate”)
58. Diclofenac Potassium
59. Dicloxacillin Sodium
60. Diflunisal
61. Digoxin
62. Diltiazem HCL
63. Diphenoxylate Atropine HCL
64. Disopyramide Phosphate
65. Disulfiram
66. Divalproex
67. Doxazosin Mesylate
68. Doxycycline
69. Doxycycline Hyclate
70. Doxycycline Monohydrate
71. Drospirenone and Ethinyl Estradiol
72. Econazole
73. Enalapril Maleate
74. Entecavir
75. Eplerenone
76. Epitol
77. Estazolam
78. Estradiol
79. Estradiol and Norethindrone Acetate [Mimvey]
80. Ethinyl Estradiol and Levonorgestrel [Portia and Jolessa]
81. Ethosuximide
82. Etodolac
83. Exemestane
A7
84. Fenofibrate
85. Fluconazole
86. Fluocinonide
87. Fluocinolone Acetonide
88. Fluoxetine HCL
89. Flurbiprofen
90. Flutamide
91. Fluticasone Propionate
92. Fluvastatin Sodium
93. Fosinopril HCTZ
94. Gabapentin
95. Glimepiride
96. Glipizide-Metformin
97. Glyburide
98. Glyburide-Metformin
99. Griseofulvin
100. Halobetasol Propionate
101. Haloperidol
102. Hydralazine
103. Hydrocodone Acetaminophen
104. Hydrocortisone Valerate
105. Hydroxyurea
106. Hydroxyzine Pamoate
107. Imiquimod
108. Irbesartan
109. Isoniazid
110. Isosorbide Dinitrate
111. Isotretinoin
112. Ketoconazole
113. Ketoprofen
114. Ketorolac Tromethamine
115. Labetalol HCL
116. Lamivudine/Zidovudine
117. Lamotrigine
118. Latanoprost
119. Leflunomide
120. Levothyroxine
121. Lidocaine HCL
122. Lidocaine-Prilocaine
123. Loperamide HCL
124. Medroxyprogesterone
125. Meprobamate
126. Metformin (F) ER
127. Methadone HCL
A8
128. Methimazole
129. Methotrexate Sodium
130. Methylphenidate
131. Methylprednisolone
132. Metoprolol Succinate
133. Metronidazole
134. Modafinil
135. Moexipril HCL
136. Moexipril HCL HCTZ
137. Montelukast
138. Nabumetone
139. Nadolol
140. Naproxen Sodium
141. Neomycin Polymyxin Hydrocortisone
142. Niacin
143. Nimodipine
144. Nitrofurantoin
145. Norethindrone Acetate
146. Norethindrone and Ethinyl Estradiol [Balziva]
147. Nortriptyline Hydrochloride
148. Nystatin
149. Nystatin/Triamcinolone
150. Omega-3-Acid Ethyl Esters
151. Omeprazole-Sodium bicarbonate
152. Ondansetron
153. Oxaprozin
154. Oxybutynin Chloride
155. Oxycodone Acetaminophen
156. Oxycodone HCL
157. Paricalcitol
158. Paromomycin
159. Penicillin VK
160. Pentoxifylline
161. Permethrin
162. Perphenazine
163. Phenytoin Sodium
164. Pilocarpine HCL
165. Pioglitazone-Metformin
166. Piroxicam
167. Potassium Chloride ER
168. Pravastatin
169. Prazosin HCL
170. Prednisolone Acetate
171. Prednisone
A9
172. Prochlorperazine
173. Progesterone
174. Propranolol
175. Raloxifene HCL
176. Ranitidine HCL
177. Silver Sulfadiazine
178. Spironolactone HCTZ
179. Sumatriptan
180. Tamoxifen Citrate
181. Temozolomide
182. Timolol Maleate
183. Tizanidine HCL
184. Theophylline
185. Tobramycin
186. Tobramycin Dexamethasone
187. Tolmetin Sodium
188. Tolterodine Tartate
189. Topiramate
190. Trazodone
191. Triamcinolone Acetonide
192. Triamterene HCTZ
193. Trifluoperazine HCL
194. Ursodiol
195. Valganciclovir
196. Valsartan HCTZ
197. Vancomycin
198. Verapamil
199. Warfarin Sodium
200. Zoledronic Acid
A10
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
THE STATE OF CONNECTICUT;
THE STATE OF ALABAMA;
THE STATE OF ALASKA;
THE TERRITORY OF AMERICAN
SAMOA;
THE STATE OF ARIZONA;
THE STATE OF ARKANSAS;
THE STATE OF COLORADO;
THE STATE OF DELAWARE;
THE DISTRICT OF COLUMBIA;
THE STATE OF FLORIDA;
THE STATE OF GEORGIA;
THE TERRITORY OF GUAM;
THE STATE OF HAWAII;
THE STATE OF IDAHO;
THE STATE OF ILLINOIS;
THE STATE OF INDIANA;
THE STATE OF IOWA;
THE STATE OF KANSAS;
THE COMMONWEALTH OF KENTUCKY;
THE STATE OF LOUISIANA;
THE STATE OF MAINE;
THE STATE OF MARYLAND;
THE COMMONWEALTH OF
MASSACHUSETTS;
THE STATE OF MICHIGAN;
THE STATE OF MINNESOTA;
THE STATE OF MISSISSIPPI;
THE STATE OF MISSOURI;
THE STATE OF MONTANA;
THE STATE OF NEBRASKA;
THE STATE OF NEVADA;
THE STATE OF NEW HAMPSHIRE;
THE STATE OF NEW JERSEY;
THE STATE OF NEW MEXICO;
THE STATE OF NEW YORK;
THE STATE OF NORTH CAROLINA;
THE STATE OF NORTH DAKOTA;
THE COMMONWEALTH OF THE NORTHERN
MARIANA ISLANDS;
THE STATE OF OHIO;
THE STATE OF OKLAHOMA;
THE STATE OF OREGON;
THE COMMONWEALTH OF
PENNSYLVANIA;
THE COMMONWEALTH OF PUERTO RICO;
THE STATE OF RHODE ISLAND;
THE STATE OF SOUTH CAROLINA;
THE STATE OF SOUTH DAKOTA;
MDL 2724
16-MD-2724
HON. CYNTHIA M. RUFE
Civil Action No. 19-CV-2407-CMR
October 31, 2019
AMENDED COMPLAINT
A11
THE STATE OF TENNESSEE;
THE STATE OF UTAH;
THE STATE OF VERMONT;
THE COMMONWEALTH OF VIRGINIA;
THE STATE OF WASHINGTON;
THE STATE OF WEST VIRGINIA;
THE STATE OF WISCONSIN;
THE STATE OF WYOMING;
v.
TEVA PHARMACEUTICALS USA, INC.;
ACTAVIS HOLDCO US, INC.;
ACTAVIS PHARMA, INC.;
AMNEAL PHARMACEUTICALS, INC.;
AMNEAL PHARMACEUTICALS LLC;
APOTEX CORP.;
ARA APRAHAMIAN;
AUROBINDO PHARMA U.S.A., INC.;
DAVID BERTHOLD;
BRECKENRIDGE PHARMACEUTICAL, INC.;
JAMES (JIM) BROWN;
MAUREEN CAVANAUGH;
TRACY SULLIVAN DIVALERIO;
DR. REDDY'S LABORATORIES, INC.;
MARC FALKIN;
GLENMARK PHARMACEUTICALS, INC., USA;
JAMES (JIM) GRAUSO;
KEVIN GREEN;
GREENSTONE LLC;
ROBIN HATOSY;
ARMANDO KELLUM;
LANNETT COMPANY, INC.;
LUPIN PHARMACEUTICALS, INC.;
MYLAN PHARMACEUTICALS INC.;
JILL NAILOR;
JAMES (JIM) NESTA;
PAR PHARMACEUTICAL COMPANIES, INC.;
NISHA PATEL;
PFIZER, INC.;
KONSTANTIN OSTAFICIUK;
DAVID REKENTHALER;
RICHARD (RICK) ROGERSON;
SANDOZ, INC.;
TARO PHARMACEUTICALS USA, INC.
UPSHER-SMITH LABORATORIES, LLC;
WOCKHARDT USA LLC;
ZYDUS PHARMACEUTICALS (USA), INC.
A12
TABLE OF CONTENTS
I.
PAGE
SUMMARY OF THE CASE ........................................................................................... 2
II.
JURISDICTION AND VENUE ...................................................................................... 9
III.
THE PARTIES.................................................................................................................. 10
IV.
FACTS SUPPORTING THE LEGAL CLAIMS ............................................................. 18
A.
Factual Support For The Allegations ................................................................... 18
B.
The Generic Drug Market .................................................................................... 20
1.
The Hatch-Waxman Act .......................................................................... 20
2.
The Importance Of Generic Drugs ......................................................... 21
3.
The Players In The Drug Distribution System ........................................ 22
a.
b.
c.
d.
e.
4.
The Cozy Nature Of The Industry And Opportunities For Collusion ..... 29
a.
b.
C.
Manufacturers/Suppliers ............................................................. 22
Wholesalers/Distributors ............................................................ 26
Group Purchasing Organizations (GPOs) .................................. 26
Pharmacy and supermarket Chains ............................................ 27
Customer Incentives .................................................................... 27
Trade Association and Customer Conferences ........................... 29
Industry Dinners and Private Meetings ...................................... 30
5.
The Overarching Conspiracy Between Generic Drug Manufacturers
Playing Nice In The Sandbox ................................................................. 33
6.
Generic Drug Price Spikes Since 2013 .................................................... 50
The Illegal Schemes ............................................................................................. 51
1.
The Overarching Conspiracy In Operation: Customer And Market
Allocation Agreements To Maintain Market Share And Avoid Price
Erosion .................................................................................................... 51
a.
Teva/Mylan ................................................................................. 52
i.
Fenofibrate ...................................................................... 52
ii.
Clonidine –TTS Patch ..................................................... 55
iii.
Tolterodine Extended Release ......................................... 60
iv.
Capecitabine .................................................................... 65
A13
b.
Teva/Sandoz ................................................................................ 68
i.
Portia and Jolessa ............................................................ 68
ii.
Temozolomide ................................................................ 70
iii.
Tobramycin ..................................................................... 74
iv.
Dexmethylphenidate HCL Extended Release ................. 76
c.
Teva/Lupin .................................................................................. 79
i.
Lamivudine/Zidovudine (generic Combivir) .................. 79
ii.
Irbesartan ......................................................................... 83
iii.
Drospirenone and ethinyl estradiol (Ocella) ................... 84
iv.
Norethindrone/ethinyl estradiol (Balziva®) ................... 87
d.
Teva/Greenstone .......................................................................... 88
i.
Oxaprozin Tablets ........................................................... 88
ii.
Tolterodine Tartrate ....................................................... 91
iii.
Piroxicam ....................................................................... 93
iv.
Cabergoline .................................................................... 96
e.
Teva/Actavis ................................................................................ 97
i. Amphetamine/Dextroamphetamine Extended Release ....... 97
ii. Amphetamine/Dextroamphetamine Immediate Release ..... 99
iii. Dextroamphetamine Sulfate Extended Release ................. 100
iv. Clonidine-TTS ................................................................... 101
v. Budesonide Inhalation ....................................................... 103
vi. Celecoxib ........................................................................... 103
f.
Teva/Par .................................................................................... 105
i.
Omega-3-Acid Ethyl Esters .......................................... 105
ii.
Entecavir ....................................................................... 108
iii.
Budesonide DR Capsules .............................................. 110
iv.
Clonidine-TTS .............................................................. 101
v.
Budesonide Inhalation .................................................. 103
g.
Teva/Taro .................................................................................. 111
i.
Enalapril Maleate .......................................................... 111
ii.
Nortriptyline Hydrochloride ......................................... 115
h.
Teva/Zydus ............................................................................... 119
i.
Fenofibrate .................................................................... 119
ii.
Paricalcitol .................................................................... 124
iii.
Niacin ER ...................................................................... 127
iv.
Etodolac Extended Release ........................................... 130
i.
Teva/Glenmark ......................................................................... 132
i.
Moexipril Hydrochloride Tablets ................................. 132
ii.
Desogestrel/Ethinyl Estradiol Tables (Kariva) ............. 134
iii.
Gabapentin Tablets ....................................................... 135
iv.
Etodolac Extended Release ........................................... 130
A14
2.
j.
Teva/Lannett ............................................................................. 136
i.
Baclofen ........................................................................ 136
k.
Teva/Amneal ............................................................................. 139
i.
Norethindrone Acetate .................................................. 139
l.
Teva/Dr. Reddy’s ...................................................................... 140
i.
Oxaprozin ...................................................................... 140
ii.
Paricalcitol .................................................................... 142
Taking The Overarching Conspiracy To A New Level: Price Fixing
(2012 – 2015) ....................................................................................... 147
a.
Teva July 31, 2012 Price Increase ............................................ 148
i.
Nadolol .......................................................................... 149
ii.
Labetalol ....................................................................... 152
iii.
Nitrofurantoin MAC Capsules ...................................... 153
b.
Increasing Prices Before A New Competitor Enters The
Market: Budesonide Inhalation Suspension
(February – April 2013) ............................................................ 154
c.
Early 2013: Teva’s Generics Business Struggles ................... 155
d.
April 2013: Teva Hires Defendant Nisha Patel ....................... 156
e.
Ranking “Quality of Competition” to Identify Price
Increase Candidates .................................................................. 160
i.
The “High Quality” Competitor Relationships ............. 161
a)
Mylan (+3) ........................................................ 162
b)
Watson/Actavis (+3) ......................................... 163
c)
Sandoz (+3) ....................................................... 164
d)
Glenmark (+3) ................................................... 165
e)
Taro (+3) ........................................................... 165
f)
Lupin (+2) ......................................................... 166
f.
May 24, 2013: The First List of Increase Candidates .............. 166
i
Glenmark ....................................................................... 168
ii.
Sandoz ........................................................................... 172
iii.
Taro ............................................................................... 175
g.
July 3, 2013 Price Increases ...................................................... 176
i.
Upsher-Smith ................................................................ 178
ii.
Mylan ............................................................................ 180
iii.
Sandoz ............................................................................ 184
h.
July 19, 2013 Price Increase (Enalapril Maleate) ..................... 185
A15
3.
i.
August 9, 2013 Price Increases (“Round 2”) ............................ 191
i.
Mylan ............................................................................ 196
ii.
Pravastatin (Glenmark/Apotex/Zydus/Lupin) .............. 199
iii.
Etodolac and Etodolac ER ............................................ 205
iv.
Impact of Price Increases .............................................. 209
j.
Price Increase Hiatus ................................................................. 210
k.
March 7, 2014: Price Increases and Overarching Conspiracy
Converge (Niacin ER) ............................................................... 211
l.
April 4, 2014 Price Increases .................................................... 214
i.
Lupin (Cephalexin Oral Suspension) ............................ 220
ii.
Greenstone (Azithromycin Oral Suspension,
Azithromycin Suspension, and Medroxyprogesterone
Tablets) ....................................................................... 223
iii.
Actavis (Clarithromycin ER Tablets, Tamoxifen
Citrate and Estazolam ................................................... 226
iv.
Multiple Manufacturers (Ketoconazole Cream and
Tablets) .......................................................................... 230
v.
New Relationships Emerge ........................................... 233
a) Breckenridge ............................................................ 233
b) Rising ....................................................................... 235
c) Versapharm .............................................................. 237
vi.
Impact ........................................................................... 238
m.
April 15, 2014 Price Increase (Baclofen) ................................. 238
n.
July 1, 2014 Price Increase (Fluocinonide) ............................... 240
o.
August 28, 2014 Price Increases ............................................... 248
i.
Mylan ............................................................................ 251
ii.
Taro ............................................................................... 255
iii.
Zydus.............................................................................. 259
iv.
Competitors Follow Teva ............................................. 260
p.
January 28, 2015 Price Increases .............................................. 261
i. Propranolol ........................................................................ 263
ii. Ciprofloxacin HCL and Glimepiride ................................ 265
iii. Griseofulvin ...................................................................... 267
Competitors Become “High Quality” After Successfully Colluding
With Teva............................................................................................... 268
a.
May 2014: Defendant Patel Updates The Quality Competitor
Rankings to Reflect New Relationships .................................. 268
i.
Apotex ........................................................................... 269
ii.
Zydus.............................................................................. 270
A16
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
4.
Heritage ......................................................................... 273
Lupin ............................................................................. 274
Par .................................................................................. 275
Greenstone ..................................................................... 276
Amneal ........................................................................... 278
Rising ............................................................................. 279
Breckenridge .................................................................. 281
Glenmark........................................................................ 282
“Quality Competitors” Collude With Each Other As Well (Not Just
With Teva) ............................................................................................ 283
a.
One Example: The Sandoz/Mylan Relationship ...................... 283
i..
Market Allocation – Valsartan HCTZ ........................... 284
ii.
Price Increases – Summer 2013 ..................................... 287
a)
Haloperidol and Trifluoperazine HCL ............... 288
b)
Benazepril HCTZ ............................................... 291
c)
Levothyroxine .................................................... 293
d)
Clomipramine HCL ........................................... 296
e)
Tizanidine .......................................................... 303
b..
Individual Defendant Relationships .......................................... 305
i..
Ara Aprahamian ............................................................. 306
ii.
David Berthold .............................................................. 307
iii.
Jim Brown ...................................................................... 308
iv.
Maureen Cavanaugh ...................................................... 309
v.
Marc Falkin .................................................................... 310
vi.
Jim Grauso ..................................................................... 311
vii.
Kevin Green ................................................................... 313
viii. Armando Kellum ........................................................... 315
ix.
Jill Nailor ....................................................................... 316
x.
James Nesta .................................................................... 317
xi.
Konstantin Ostaficiuk .................................................... 318
xii.
Nisha Patel ..................................................................... 319
xiii. David Rekenthaler ........................................................ 320
xiv. Rick Rogerson ................................................................ 322
xv.
Tracy Sullivan ................................................................ 323
5.
A Commitment To The Overarching Conspiracy Was Instrumental
To The Success Of The Price Fixing Agreements ................................. 324
6.
“Quality Competitor” Rankings Relate To Price Increases, But
Even “Low Quality” Competitors Comply With The Overarching
Conspiracy ............................................................................................. 326
a.
Example: Camber Pharmaceuticals, Inc. (and its President,
Defendant Ostaficiuk) ................................................................ 326
A17
D.
7.
Teva Profitability Increases Dramatically As A Result Of Price
Increases ................................................................................................. 332
8.
Teva and Its Executives Knowingly Violated The Antitrust Laws ....... 332
9.
Price Increases Slow Dramatically After Government
Investigations Commence ...................................................................... 336
Consciousness Of Guilt...................................................................................... 338
1.
2.
Spoliation of Evidence .......................................................................... 339
Obstruction of Justice ............................................................................ 340
V.
PURCHASES OF GENERIC PHARMACEUTICALS THROUGH MMCAP ........... 341
VI.
TRADE AND COMMERCE......................................................................................... 342
VII.
MARKET EFFECTS ..................................................................................................... 342
VIII.
CAUSES OF ACTION
COUNT ONE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT TEVA
AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT AND
SEVERAL LIABILITY – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 343
COUNT TWO
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
MYLAN AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 347
COUNT THREE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
SANDOZ AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 349
COUNT FOUR
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
ACTAVIS AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
A18
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF |THE SHERMAN ACT ......................................... 351
COUNT FIVE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
TARO AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 353
COUNT SIX
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
GLENMARK AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 355
COUNT SEVEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
LUPIN AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 356
COUNT EIGHT
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT |
AMNEAL AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 358
COUNT NINE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
APOTEX AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 359
COUNT TEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
AUROBINDO AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 361
COUNT ELEVEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
BRECKENRIDGE AND ALL OTHER CORPORATE DEFENDANTS UNDER
A19
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 362
COUNT TWELVE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
DR. REDDY'S AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 364
COUNT THIRTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANTS
PFIZER AND GREENSTONE AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY
TO ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 365
COUNT FOURTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
LANNETT AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 367
COUNT FIFTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
PAR AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT AND
SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 368
COUNT SIXTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
UPSHER-SMITH AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 370
COUNT SEVENTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
WOCKHARDT AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 371
COUNT EIGHTEEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANT
A20
ZYDUS AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT AND
SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC DRUGS IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT .......................................... 372
COUNT NINETEEN
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT ARA APRAHAMIAN) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 374
COUNT TWENTY
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT DAVID BERTHOLD) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 375
COUNT TWENTY-ONE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT JAMES (JIM) BROWN) – HORIZONTAL CONSPIRACY
TO ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 377
COUNT TWENTY-TWO
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT MAUREEN CAVANAUGH) – HORIZONTAL CONSPIRACY
TO ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 379
COUNT TWENTY-THREE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT MARC FALKIN) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 382
COUNT TWENTY-FOUR
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT JAMES (JIM) GRAUSO) – HORIZONTAL CONSPIRACY
TO ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 384
COUNT TWENTY-FIVE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT KEVIN GREEN) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 386
A21
COUNT TWENTY-SIX
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT ROBIN HATOSY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 388
COUNT TWENTY-SEVEN
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT ARMANDO KELLUM) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 390
COUNT TWENTY-EIGHT
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT JILL NAILOR) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 392
COUNT TWENTY-NINE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT JAMES NESTA) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 394
COUNT THIRTY
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT KONSTANTIN OSTAFICIUK) – HORIZONTAL
CONSPIRACY TO ALLOCATE MARKETS AND FIX PRICES FOR
MULTIPLE GENERIC DRUGS IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT ....................................................................... 396
COUNT THIRTY ONE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT NISHA PATEL) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 397
COUNT THIRTY-TWO
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT DAVID REKENTHALER) – HORIZONTAL CONSPIRACY
TO ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 401
COUNT THIRTY-THREE
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT RICHARD (RICK) ROGERSON) – HORIZONTAL
CONSPIRACY TO ALLOCATE MARKETS AND FIX PRICES FOR
A22
MULTIPLE GENERIC DRUGS IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT ....................................................................... 404
COUNT THIRTY-FOUR
(BY CERTAIN PLAINTIFF STATES AGAINST
DEFENDANT TRACY SULLIVAN) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR MULTIPLE GENERIC
DRUGS IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ...................... 406
COUNT THIRTY-FIVE
SUPPLEMENTAL STATE LAW CLAIMS ................................................................. 408
Connecticut ........................................................................................................ 408
Alabama ............................................................................................................. 409
Alaska ................................................................................................................ 409
American Samoa ................................................................................................ 410
Arizona ............................................................................................................... 411
Arkansas ............................................................................................................. 412
Colorado ............................................................................................................. 413
Delaware ............................................................................................................ 413
District of Columbia .......................................................................................... 413
Florida ................................................................................................................ 414
Guam .................................................................................................................. 416
Hawaii ................................................................................................................ 416
Idaho .................................................................................................................. 417
Illinois ................................................................................................................ 418
Indiana................................................................................................................ 418
Iowa.................................................................................................................... 419
Kansas ................................................................................................................ 420
Kentucky ............................................................................................................ 420
Louisiana ............................................................................................................ 424
Maine ................................................................................................................. 424
Maryland ............................................................................................................ 425
Massachusetts .................................................................................................... 425
Michigan ............................................................................................................ 426
Minnesota ........................................................................................................... 427
Mississippi ......................................................................................................... 431
Missouri ............................................................................................................. 432
Montana ............................................................................................................. 432
Nebraska ............................................................................................................ 434
Nevada ............................................................................................................... 435
New Hampshire ................................................................................................. 436
New Jersey ......................................................................................................... 439
New Mexico ....................................................................................................... 440
New York ........................................................................................................... 441
North Carolina ................................................................................................... 442
A23
North Dakota ...................................................................................................... 446
Northern Mariana Islands .................................................................................. 446
Ohio.................................................................................................................... 447
Oklahoma ........................................................................................................... 448
Oregon................................................................................................................ 448
Pennsylvania ...................................................................................................... 449
Puerto Rico......................................................................................................... 459
Rhode Island ...................................................................................................... 461
South Carolina ................................................................................................... 462
South Dakota...................................................................................................... 462
Tennessee ........................................................................................................... 464
Utah .................................................................................................................... 465
Vermont ............................................................................................................. 466
Virginia .............................................................................................................. 466
Washington ........................................................................................................ 467
West Virginia ..................................................................................................... 468
Wisconsin ........................................................................................................... 468
Wyoming............................................................................................................ 469
PRAYER FOR RELIEF ............................................................................................................ 470
JURY DEMAND ....................................................................................................................... 471
A24
People of the same trade seldom meet together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
-
Adam Smith, The Wealth of Nations, 1776
Teva said in a statement it would continue to defend itself and that while it does "review
prices in the context of market conditions, availability and cost of production," it does not
"discuss individual pricing rationale/strategies." It denied that it engaged in anything that
would lead to criminal or civil liability.
"Overall, we establish prices to enable patient access, maintain our commitment to
innovative and generic medicines and fulfill obligations to our shareholders," Teva said.
"Teva delivers high-quality medicines to patients around the world, and is committed to
complying with all applicable competition laws and regulations in doing so. Teva fosters a
culture of compliance with these laws and regulations, and is dedicated to conducting
business with integrity and fairness. Litigation surrounding U.S. generic pricing of several
companies, including Teva, continues to be the subject of innacurate media stories."
-
Statements by Teva reported in Law360, January 18, 2019
AMENDED COMPLAINT1
The States of Connecticut, Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware,
Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West
Virginia, Wisconsin, Wyoming, the Commonwealths of Kentucky, Massachusetts, the Northern
Mariana Islands, Pennsylvania, Puerto Rico, and Virginia, the Territories of American Samoa
and Guam, and the District of Columbia (the "Plaintiff States"), by and through their Attorneys
General, bring this civil law enforcement action against Teva Pharmaceuticals USA, Inc.
("Teva"), Actavis Holdco US, Inc., Actavis Pharma, Inc., Amneal Pharmaceuticals, Inc., Amneal
Pharmaceuticals LLC, Apotex Corp., Ara Aprahamian, Aurobindo Pharma U.S.A., Inc., David
1
The Plaintiff States are filing this Amended Complaint as of right under Fed. R. Civ. P.
15(a)(1).
A25
Berthold, Breckenridge Pharmaceutical, Inc., James (Jim) Brown, Maureen Cavanaugh, Tracy
Sullivan DiValerio, Dr. Reddy's Laboratories, Inc., Marc Falkin, Glenmark Pharmaceuticals,
Inc., USA, James (Jim) Grauso, Kevin Green, Greenstone LLC, Robin Hatosy, Armando
Kellum, Lannett Company, Inc., Lupin Pharmaceuticals, Inc., Mylan Pharmaceuticals Inc., Jill
Nailor, James (Jim) Nesta, Konstantin Ostaficiuk, Par Pharmaceutical Companies, Inc., Nisha
Patel, Pfizer, Inc., David Rekenthaler, Richard (Rick) Rogerson, Sandoz, Inc., Taro
Pharmaceuticals USA, Inc., Upsher-Smith Laboratories, LLC, Wockhardt USA LLC, and Zydus
Pharmaceuticals (USA), Inc. (collectively, the "Defendants") and allege as follows:
I.
SUMMARY OF THE CASE
1.
For many years, the generic pharmaceutical industry has operated pursuant to an
understanding among generic manufacturers not to compete with each other and to instead settle
for what these competitors refer to as "fair share." This understanding has permeated every
segment of the industry, and the purpose of the agreement was to avoid competition among
generic manufacturers that would normally result in significant price erosion and great savings to
the ultimate consumer. Rather than enter a particular generic drug market by competing on price
in order to gain market share, competitors in the generic drug industry would systematically and
routinely communicate with one another directly, divvy up customers to create an artificial
equilibrium in the market, and then maintain anticompetitively high prices. This "fair share"
understanding was not the result of independent decision making by individual companies to
avoid competing with one another. Rather, it was a direct result of specific discussion,
negotiation and collusion among industry participants over the course of many years.
2.
By 2012, Teva and other co-conspirators decided to take this understanding to the
next level. Apparently unsatisfied with the status quo of "fair share" and the mere avoidance of
price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging
A26
price-fixing conspiracies in the history of the United States. Teva and its competitors sought to
leverage the collusive nature of the industry to not only maintain their "fair share" of each
generic drug market, but also to significantly raise prices on as many drugs as possible. In order
to accomplish that objective, Teva selected a core group of competitors with which it already had
very profitable collusive relationships – Teva referred to them as "High Quality" competitors –
and targeted drugs where they overlapped. Teva had understandings with its highest quality
competitors to lead and follow each other’s price increases, and did so with great frequency and
success, resulting in many billions of dollars of harm to the national economy over a period of
several years.
3.
At the zenith of this collusive activity involving Teva, during a 19-month period
beginning in July 2013 and continuing through January 2015, Teva significantly raised prices on
approximately 112 different generic drugs. Of those 112 different drugs, Teva colluded with its
"High Quality" competitors on at least 86 of them (the others were largely in markets where
Teva was exclusive). The size of the price increases varied, but a number of them were well
over 1,000%.
4.
In July 2014, the State of Connecticut initiated a non-public investigation into
suspicious price increases for certain generic pharmaceuticals. Over time, the investigation
expanded and Connecticut was joined in its efforts by forty-eight (48) additional states and U.S.
territories. The allegations in this Amended Complaint are based on, and supported by,
information and evidence gleaned directly from the investigation, including: (1) the review of
many thousands of documents produced by dozens of companies and individuals throughout the
generic pharmaceutical industry, (2) an industry-wide phone call database consisting of more
than 11 million phone call records from hundreds of individuals at various levels of the
A27
Defendant companies and other generic manufacturers, and (3) information provided by several
as-of-yet unidentified cooperating witnesses who were directly involved in the conduct alleged
herein.
5.
As a result of the information and evidence developed through that investigation,
which is still ongoing, the Plaintiff States allege that Defendant Teva consistently and
systematically, over a period of several years, along with the other Defendants named herein and
other unnamed co-conspirators, engaged in contracts, combinations and conspiracies that had the
effect of unreasonably restraining trade, artificially inflating and maintaining prices and reducing
competition in the generic pharmaceutical industry throughout the United States, including but
not limited to, the markets for well more than one-hundred (100) different generic drugs, many
of which are identified herein. This conduct has resulted in many billions of dollars of
overcharges to the Plaintiff States and others, and has had a significant negative impact on our
national health and economy.
6.
Plaintiff States also allege that Defendants participated in an overarching
conspiracy, the effect of which was to minimize if not thwart competition across the generic drug
industry. The overarching conspiracy was effectuated by a series of conspiracies that affected
and continue to affect the market for a number of generic drugs identified in this Amended
Complaint.
7.
The Plaintiff States focus here on the role of these named Defendants and their
participation in and agreement with this overarching conspiracy. The Amended Complaint
describes conspiracies regarding the sale of specific drugs, and how these specific conspiracies
are also part of the larger overarching conspiracy. The Plaintiff States continue to investigate
additional conspiracies, involving these and other generic drug manufacturers, regarding the sale
A28
of other drugs not identified in this Complaint, and will likely bring additional actions based on
those conspiracies at the appropriate time in the future.
8.
Defendants' illegal agreements have raised prices, maintained artificially inflated
prices, thwarted Congress's goal to lower the prices of drugs, and thus frustrated the potential of
the industry to deliver great value to Plaintiff States and those they represent. Generic drugs are
pharmaceutically equivalent to the referenced brand name drug in dosage, form, route of
administration, strength or concentration, and amount of active ingredient. Generic drugs can
save (and have saved) consumers, other purchasers of drugs, and taxpayers tens of billions of
dollars annually because generic drugs are a lower-priced alternative to brand name drugs.
When the manufacturer of a branded drug loses the market exclusivity that comes with patent
rights, generic drugs offer lower prices and greater access to healthcare for all consumers in the
United States through genuine competition. A consumer with a prescription can fill that
prescription not only with the brand name drug, but also with a generic version of that drug, if
one is available. State laws often require pharmacists to fill prescriptions with generic versions
of the drug.
9.
Typically, when the first generic manufacturer enters a market for a given drug,
the manufacturer prices its product slightly lower than the brand-name manufacturer. When a
second generic manufacturer enters, that reduces the average generic price to nearly half the
brand-name price. As additional generic manufacturers market the product, the prices continue
to fall. For drugs that attract a large number of generic manufacturers, the average generic price
falls to 20% or less of the price of the branded drug.
10.
Generic drugs were one of the few "bargains" in the United States healthcare
system. Health care experts believe cost savings from the growing number of generic drugs
A29
helped keep the lid on increasing health care costs. With the Hatch-Waxman Act of 1984,
Congress designed the generic drug market to keep costs low, and the market initially operated
that way.
11.
At some point, that price dynamic changed for many generic drugs. Prices for
hundreds of generic drugs have risen – while some have skyrocketed, without explanation,
sparking outrage from politicians, payers and consumers across the country whose costs have
doubled, tripled, or even increased 1,000% or more. The growing outrage and public reports of
unexplained and suspicious price increases caused the State of Connecticut to commence its
investigation in July 2014. Shortly thereafter, Congress opened an inquiry and various
companies acknowledged that a criminal grand jury investigation had been convened by the
United States Department of Justice Antitrust Division.
12.
Generic drug manufacturers argued publicly that the significant price increases
were due to a myriad of benign factors, such as industry consolidation, FDA-mandated plant
closures, or elimination of unprofitable generic drug product lines. What the Plaintiff States
have found through their investigation, however, is that the reason underlying many of these
price increases is much more straightforward – illegal collusion among generic drug
manufacturers. Prices of many generic pharmaceuticals were and remain artificially inflated
through collusive bid rigging and market allocation agreements designed to prevent price wars
from occurring when key competitive opportunities arise in the marketplace.
13.
Generic drug manufacturers, through their senior leadership and marketing, sales
and pricing executives, have routine and direct interaction. The Defendants exploited their
interactions at various and frequent industry trade shows, customer conferences and other similar
events, to develop relationships and sow the seeds for their illegal agreements. These
A30
anticompetitive agreements are further refined and coordinated at regular "industry dinners,"
"girls' nights out," lunches, parties, golf outings, frequent telephone calls, e-mails and text
messages.
14.
The anticompetitive conduct – schemes to fix and maintain prices, allocate
markets and otherwise thwart competition – has caused, and continues to cause, significant harm
to the United States healthcare system, which is ongoing. Moreover, executives and others at the
highest levels in many of the Defendant companies, including but not limited to Defendants Ara
Aprahamian, David Berthold, James (Jim) Brown, Maureen Cavanaugh, Tracy Sullivan
DiValerio, Marc Falkin, James (Jim) Grauso, Kevin Green, Armando Kellum, Jill Nailor, James
(Jim) Nesta, Konstantin (Kon) Ostaficiuk, Nisha Patel, David Rekenthaler, and Richard (Rick)
Rogerson, among others, conceived, directed and ultimately benefited from these schemes.
15.
Defendant Teva is a consistent participant in the conspiracies identified in this
Amended Complaint, but the conduct is pervasive and industry-wide. The schemes identified
herein are part of a larger, overarching understanding about how generic manufacturers fix prices
and allocate markets to suppress competition. Through its senior-most executives and account
managers, Teva participated in a wide-ranging series of restraints with more than a dozen generic
drug manufacturers, all of whom knowingly and willingly participated. As a result of these
conspiracies, Defendants reaped substantial monetary rewards.
16.
Defendants' anticompetitive conduct falls principally into two categories, the
overarching goal being to avoid price erosion and maintain inflated pricing within and across
their respective broad product portfolios and, at times, increase pricing for targeted products
without triggering a “fight to the bottom” among existing competitors. First, to avoid competing
with one another and thus eroding the prices for a myriad of generic drugs, Defendants – either
A31
upon their entry into a given generic market or upon the entry of a new competitor into that
market – communicated with each other to determine and agree on how much market share and
which customers each competitor was entitled to. They then implemented the agreement by
either refusing to bid for particular customers or by providing a cover bid that they knew would
not be successful.
17.
Second, and often in conjunction with the market allocation schemes, competitors
in a particular market communicated -- either in person, by telephone, or by text message – and
agreed to collectively raise and/or maintain prices for a particular generic drug.
18.
Defendants here understood and acted upon an underlying code of conduct that is
widespread in the generics industry: an expectation that any time a competitor is entering a
particular generic drug market, it can contact its competitors and allocate the market according to
a generally agreed-upon standard of "fair share" in order to avoid competing and keep prices
high. While different drugs may involve different sets of companies, this background
understanding remains constant and is an important component of the Defendants' ability to
reach agreements for specific drugs.
19.
The Defendants knew their conduct was unlawful. The conspirators usually chose
to communicate in person or by cell phone, in an attempt to avoid creating a written record of
their illegal conduct. The structure of the generic drug industry provided numerous opportunities
for collusive communications at trade shows, customer events and smaller more intimate dinners
and meetings. When communications were reduced to writing or text message, Defendants often
took overt and calculated steps to destroy evidence of those communications.
20.
As a result of the conspiracies identified in this Amended Complaint, consumers
and payors nationwide, including the Plaintiff States, paid substantially inflated and
A32
anticompetitive prices for numerous generic pharmaceutical drugs, and the Defendants illegally
profited as a result.
21.
The Plaintiff States seek a finding that the Defendants' actions violated federal
and state antitrust and consumer protection laws; a permanent injunction preventing the
Defendants from continuing their illegal conduct and remedying the anticompetitive effects
caused by their illegal conduct; disgorgement of the Defendants' ill-gotten gains; damages on
behalf of various state and governmental entities and consumers in various Plaintiff States; and
civil penalties and other relief as a result of Defendants' violations of law.
**********
5.
115.
The Overarching Conspiracy Between Generic Drug Manufacturers –
Playing Nice in the Sandbox
As a result of these communications, sales and marketing executives in the
generic pharmaceutical industry are well aware of their competitors' current and future business
plans. This reciprocal sharing of inside information greatly facilitates agreements among
competitors to allocate markets to avoid price competition.
116.
The overarching conspiracy among generic manufacturers, however – which ties
together all of the agreements on individual drugs identified in this Complaint – is an agreedupon code that each competitor is entitled to its "fair share" of the market, whether that market is
a particular generic drug, or a number of generic drugs. Coined "fair share," the term is
generally understood as an approximation of how much market share each competitor is entitled
to, based on the number of competitors in the market, with a potential adjustment based on the
timing of entry. Once a manufacturer has achieved its "fair share," it is generally understood that
the competitor will no longer compete for additional business. The common goal or purpose of
A33
this overarching agreement is to keep prices high, avoid price erosion and serve as the basis for
further supra-competitive price increases.
117.
This overarching agreement is widespread across the generic drug industry and is
broader than the Defendant manufacturers named in this Complaint. The Plaintiff States focus
here on the role of these named Defendants and their participation in, and agreement with, this
overarching conspiracy. This Complaint describes conspiracies regarding the sale of specific
drugs, and how these specific conspiracies are also part of the larger overarching conspiracy.
118.
The exact contours of this "fair share" understanding, which has been in place for
many years (and pre-dates any of the specific conduct detailed herein), has evolved over time
during the numerous in-person meetings, telephonic communications, and other interactions
between generic manufacturers about specific drugs. These business and social events occur
with such great frequency that there is an almost constant ability for Defendants to meet in
person and discuss their business plans. For example, between February 20, 2013 and December
20, 2013 (a 41-week period), there were at least forty-four (44) different tradeshows or customer
conferences where the Defendants had the opportunity to meet in person. These in-person
meetings gave the Defendants the opportunity and cover to have these conversations, and reach
these agreements, without fear of detection.
119.
As described in more detail below, when necessary, this larger understanding was
reinforced through phone calls and text messages between the Defendants to discuss "fair share"
and the desire to maintain or raise prices with respect to specific drugs. These types of
communications occur with great frequency across the industry, including among Defendants.
120.
For example, from the period of January 1, 2013 through December 31, 2013,
senior sales executives and other individuals responsible for the pricing, marketing and sales of
A34
generic drugs at Defendant Teva spoke to representatives of every significant competitor by
phone and/or text on multiple occasions. Phone calls and text messages with several of those
key competitors during the 2013 calendar year are set forth below. The following Table (Table
1), which is conservative because it is based on phone and text message records from only some
of the executives and salespeople at issue, and therefore shows only some of the phone calls and
text messages between the Defendants during that period, sheds some light on the frequency with
which Defendants communicated with each other throughout 2013.
Table 1
Teva phone/text communications with other Defendants (by month)
January 1, 2013 – December 31, 2013
Actavis
Glenmark
Greenstone
Lupin
Mylan
Sandoz
Taro
Zydus
Totals
121.
Jan-13
2
0
2
10
31
17
0
13
75
Feb-13
2
3
0
5
47
5
0
23
85
Mar-13
0
0
20
9
32
4
0
42
107
Apr-13
7
0
1
3
37
4
0
20
72
May-13
27
26
4
33
33
12
2
30
167
Jun-13
1
9
5
9
26
16
1
40
107
Jul-13
17
6
6
19
26
18
8
59
159
Aug-13
12
8
1
9
16
14
11
21
92
Sep-13
15
1
0
5
1
3
0
34
59
Oct-13
40
12
2
13
1
0
11
148
227
Nov-13
13
14
7
6
0
9
1
58
108
Dec-13
47
16
11
0
11
2
1
43
131
Totals
183
95
59
121
261
104
35
531
1389
Of the 1,389 calls listed in Table 1, 1,234 of them – or 89% – involved
Defendants Green, Patel and Rekenthaler of Teva speaking with competitors. Many – though
not all – of those communications involve matters that are addressed throughout this Complaint.
122.
Similarly, from the period of January 1, 2014 through December 31, 2014, senior
sales executives and other individuals responsible for the pricing, marketing and sales of generic
drugs at Defendant Teva continued to speak to representatives of every significant competitor by
phone and/or text on multiple occasions. Phone calls and text messages with several of those
key competitors during the 2014 calendar year are set forth below. The following Table (Table
2), which is conservative because it is based on phone and text message records from only some
of the executives and salespeople at issue, and therefore shows only some of the phone calls and
text messages between the Defendants during that period, sheds similar light on the frequency
with which Defendants communicated with each other throughout 2014.
A35
Table 2
Teva phone/text communications with other Defendants (by month)
January 1, 2014 – December 31, 2014
Actavis
Glenmark
Greenstone
Lupin
Mylan
Sandoz
Taro
Zydus
Totals
123.
Jan-14
31
4
17
11
6
5
1
18
93
Feb-14
17
11
3
5
1
10
1
36
84
Mar-14
47
11
13
13
1
7
7
44
143
Apr-14
42
7
3
4
1
10
4
24
95
May-14
76
7
1
0
7
0
17
37
145
Jun-14
9
2
1
0
2
1
16
14
45
Jul-14
38
9
6
0
0
28
5
19
105
Aug-14
24
6
1
0
10
7
2
15
65
Sep-14
36
1
9
0
13
4
1
5
69
Oct-14
23
6
0
0
5
1
0
5
40
Nov-14
8
3
0
0
2
6
0
4
23
Dec-14
14
3
0
0
9
3
1
4
34
Totals
365
70
54
33
57
82
55
225
941
Of the 941 calls listed in Table 2, 778 of them – or 83% – involved Defendants
Patel and Rekenthaler of Teva speaking with competitors (by this time, Defendant Green no
longer worked at Teva). Many – though not all – of those communications involve matters that
are addressed throughout this Complaint.
124.
It was not just Teva personnel speaking to their competitors, however. All of
these individuals were speaking to each other, when needed, hundreds or even thousands of
times to ensure adherence to the overarching conspiracy. Because it would be too voluminous to
list the total number of calls among all of the Defendants, the following graphic shows the
interlocking web of communications and relationships between just some of the individuals
employed by Teva and its key competitors. Each line in the graphic below demonstrates that at
least one phone call or text message was sent between those individuals (identified by their
initials) while they were competitors. For many of these individuals, there were hundreds of
calls and texts with competitors, but the volume of those communications is not captured by this
graphic.
A36
125.
In order to provide some organizational principle around the massive amount of
collusive behavior by the Defendants described in this Complaint, certain sections are centered
around the relationship between Defendant Teva and another conspirator. However, this
convenience should not imply that the Complaint is solely concerned with bilateral relationships
involving Teva.
126.
The specific drug agreements often involve overlapping sets of Defendants in
communication with each other, all following their agreed-upon “fair share” code of conduct.
For example, to view only a small portion of the interlocking, overlapping web of collusion
formed by Defendants: Teva, Taro and Wockhardt discussed amongst themselves the allocation
of the Enalapril Maleate market; Teva and Taro communicated with Sandoz concerning the
prices for Ketoconazole Cream; Sandoz worked with Mylan to allocate the market for Valsartan
HCTZ; Teva, Mylan and Par all communicated with each other in the spring of 2014 concerning
the market for Budesonide DR Capsules. These are not isolated, one-off agreements, but rather
demonstrate the ongoing, sprawling nature of the Defendants’ overarching conspiracy.
127.
Referred to sometimes as the "rules of engagement" for the generic drug industry,
the fair share understanding among Defendants dictates that when two generic manufacturers
A37
enter the market at the same time, they generally expect that each competitor is entitled to
approximately 50% of the market. When a third competitor enters, each competitor expects to
obtain 33% share; when a fourth competitor enters, each expects 25%; and so on, as additional
competitors enter the market.
128.
When a generic drug manufacturer is the first to enter a particular drug market on
an exclusive basis it is commonly understood that that manufacturer is entitled to a little more
than its proportional share of the market. For example, when Defendant Dr. Reddy's was about
to enter the market for a drug in January 2013, the Vice President of Sales and Marketing
explained during negotiations with his competitor that "he views it this way. If they [Dr.
Reddy's] are first and others come out after, he deserves 60%. If he launches with others on day
[one], he considers fair share 2-50%, 3-33%, 4-25%, etc."
129.
Conversely, those generic manufacturers that enter later are typically entitled to a
little less than their proportional share. One of the many examples of this occurred in March
2014, when – as discussed more fully below – Defendant Lupin entered the Niacin ER market
after Defendant Teva had previously been exclusive. Defendants Patel of Teva and Berthold of
Lupin spoke directly by phone a number of times during this period, including three (3) calls on
March 24, 2014. That same day, Defendant Rekenthaler of Teva sent an internal e-mail to
Defendant Patel stating: "We should concede Optum then defend everything else. This should
be it for Lupin. I believe this should be the 40% we were okay with conceding." Here, Teva's
expectation to maintain 60% share in a two-player market, after being the first in that market,
was consistent with the overarching conspiracy.
130.
Defendant Taro went so far as to create a graphic representation of that
understanding, taking into account both the number of competitors and order of entry to estimate
what its "fair share" should be in any given market:
A38
M a rket Sh a re - Fa ir Unit S hare a ssumptio n5
Orde r of Entry Gri d
Numbe r o f Competi tor s
Numbe r o f
Compet it o rs
larder of
1
Entry
1
2
3
4
5
6
7
100%
60%
45%
35 %
30%
3 0%
30%
40%
35%
30%
25%
25%
25%
20%
20%
20%
2 0%
20%
15%
15%
10%
15%
1 0%
15%
10 %
1 0%
10%
10%
100%
100%
100%
1 00%
I
2
3
4
5
6
7
Total
100%
100%
100%
[TARO_000224150.]
131.
Although these general parameters are well-known, there is no precise method for
apportioning "fair share" because market share is ultimately determined by either winning or
maintaining the business of various customers, which is inherently variable in a given year. The
shared objective, however, is to attain a state of equilibrium, where no competitors are
incentivized to compete for additional market share by eroding price.
132.
This common goal was stated succinctly by Defendant Aprahamian, who advised
the Taro Pricing Department in training documents from September and November 2013 that
"[g]iving up share to new entrant (as warranted) shows responsibility and will save us in the long
run" and "[d]on't rock the boat – [g]reedy hogs go to slaughter." As demonstrated throughout the
Amended Complaint, Aprahamian’s idea of “responsibility” meant constantly reaching out to
competitors in order to coordinate giving up share to reach a “fair” allocation and keep prices
high.
133.
This scheme to minimize competition and allocate "fair share" is typically
implemented as follows. First, Defendants allocate the market for an individual drug based on
the number of competitors and the timing of their entry so that each competitor obtains an
acceptable share of the market. Then, the competitors agree on ways to avoid competing on
price and, at times, significantly raise price. This pattern is frequently followed even in the
A39
absence of direct communication between the competitors, demonstrating the universal code of
conduct agreed to by Defendants.
134.
This "fair share" understanding has been particularly effective when a new
competitor enters the market – a time when, in a free-functioning, competitive market for generic
drugs, prices would be expected to go down. In today's generic drug markets, a new competitor
will either approach or be approached by the existing competitors. Existing competitors will
agree to "walk away" from a specific customer or customers by either refusing to bid or
submitting a cover bid. The new competitor's transition into the market is seamless; the new
entrant is ceded market share and immediately charges a supra-competitive price. The
competitors then continue this process of dividing up customers until the market reaches a new
artificial equilibrium. This is referred to as a "stable" market.
135.
"Fair share" principles also dictate how generic drug manufacturers respond when
a competitor experiences supply issues. If the disruption is temporary, the existing competitors
will refrain from taking any action that might upset the market balance. By contrast, if the
disruption is for a longer term, the competitors will divide up customers until each player
achieves a revised "fair share" based on the number of players remaining in the market. For
example, in July 2013, a retail pharmacy customer e-mailed Defendant Taro stating that one of
Defendant Mylan's products was on back order and asked Taro to bid for the business.
Defendant Aprahamian sent an internal e-mail stating "Not inclined to take on new business . . .
Wholesalers have product, let them pull from there temporarily and we can certainly review if
shortage persists. Don't want to overreact to this product. Not sure how long Mylan is out."
136.
These rules about "fair share" apply equally to price increases. As long as
everyone is playing fair, and the competitors believe that they have their "fair share," the larger
understanding dictates that they will not seek to compete or take advantage of a competitor's
A40
price increase by bidding a lower price to take that business. Doing so is viewed as "punishing"
a competitor for raising prices – which is against the "rules." Indeed, rather than competing for
customers in the face of a price increase, competitors often use this as an opportunity to follow
with comparable price increases of their own.
137.
For example, in May 2013 after a Glenmark price increase on a number of
different drugs (discussed more fully below), Teva was approached by a large retail customer
requesting a bid for several drugs. Defendant Green immediately sought to determine whether
this request was due to a competitor price increase, in order to determine what Teva's strategy
should be:
On May 29, 2013, at 11 :52 PM, "Kevin Green" < Kevin.Orccn @tevapharm.eom> wrote:
Do you think the Fluconazole Tabs below is due to a recent price increase. mdon't have my list
here at home. We arc in a great inventory position, but not sure I want to steal it on an increase.
Teva declined to bid, after conversations with its competitors confirming that the reason for the
request was due to a competitor's price increase.
138.
When a generic manufacturer participates in this scheme, and prices stay high,
this is viewed as "playing nice in the sandbox." For example – as discussed more fully below –
in December 2014 Defendant Teva was approached by a large retail customer on behalf of
Defendant Greenstone. The customer indicated that Greenstone was entering the market for
Cabergoline and was seeking to target specific customers. The customer specifically requested
that Teva give up a large customer to the new entrant, and indicated that "Greenstone has
promised to play nice in the sandbox." After discussing the matter internally, a Teva
representative responded to the customer: "[t]ell Greenstone we are playing nice in the sandbox
and we will let them have [the targeted customer.]"
A41
139.
Similarly, when a generic manufacturer is "playing nice in the sandbox," it is
generally referred to as a "responsible" or "rational" competitor. For instance, in May 2013,
R.T., a senior sales and marketing executive at Defendant Sandoz, sent an internal e-mail to J.G.,
another Sandoz senior executive, stating "My sense is that Sandoz is viewed by customers and
competition as a respectful/responsible player in the market, which we should be proud of and
has taken years to develop. I would be very careful to destroy this through behavior that is too
aggressive or desperation."
140.
Defendant Sandoz, in turn, uses that same terminology to refer to its competitors
that are acting in accordance with "fair share" principles. For example, in internal company
presentations throughout 2014, Sandoz consistently referred to Defendant Actavis as a
"responsible competitor" and Defendant Taro as a "very responsible price competitor."
141.
Defendant Teva had its own term of art – referring to the competitors it had the
most collusive relationships with as "high quality" competitors. As explored more fully below,
Teva had long-standing relationships with these competitors, including several of the corporate
Defendants, which affected nearly every overlapping drug they sold. As just one example,
Defendant Patel of Teva exchanged seven (7) text messages and had two (2) long phone calls
with Defendant Aprahamian of Taro on June 3 and 4, 2014. After a lengthy twenty-five (25)
minute call with Aprahamian on the morning of June 4, Patel sent an internal e-mail to K.G., a
Teva senior marketing executive, stating "[w]e should probably discuss how we want to handle
all Taro increase items. Taro is a high quality competitor – I think we need to be responsible
where we have adequate market share."
142.
Adherence to the rules regarding "fair share" is critical in order to maintain high
prices. Indeed, that is the primary purpose of the agreement. If even one competitor does not
A42
participate (and, thus behave in accordance with) the larger understanding, it can lead to
unwanted competition and lower prices. In the relatively few instances where a competitor
prioritizes gaining market share over the larger understanding of maintaining "fair share," that
competitor is viewed as "irresponsible," and is spoken to by other competitors. For example, in
March 2015, Defendant Upsher-Smith learned that Defendant Sandoz had submitted a bid on a
product not identified in the Amended Complaint at one of Upsher-Smith's GPO customers.
B.P., a senior account manager at Upsher-Smith, forwarded that information internally stating "I
can't believe they have chosen to compete against us since we had this business. How does this
help us? We play fair and they don't?"
143.
"Fair share," "playing nice in the sandbox," and similar terminology have become
part of the industry lexicon, and thus part of the larger understanding between Defendants.
Generic drug manufacturers actively and routinely monitor their fair share and that of their
competitors, as well as discuss customer allocation amongst each other within the context of
agreements on specific drugs, as set forth more fully below. For example, in July 2013, L.J., a
senior marketing executive at Sandoz, sent an internal e-mail identifying 47 products where
Sandoz did not have "fair share" of the market. After some back-and-forth internal joking
among Sandoz executives about the idea that Sandoz might actually attempt to compete for
business in those markets by driving prices down, Defendant Kellum responded by emphasizing
the truly industry-wide nature of the agreement:
From:
~nt
To:
Subject
Kellum, Armando
Tuesday. July 02, 2013 12:31 AM
Re: Product Sales and Mar1cet Share Performance_v17 (3).xts
Fair Share for alllll
144.
Indeed, the concept of "fair share" is so well ingrained in the generic
pharmaceutical industry that even customers are aware of, and at times facilitate, collusion
A43
among generic manufacturers. For example, in June 2013, Defendant Dr. Reddy's was entering
the market on a product not identified in the Amended Complaint where Defendant Par had
previously been exclusive. K.N., a senior account executive at Dr. Reddy's, sent an internal email reporting that "[a GPO customer] has indicated that Par will walk away, so we have put
together a proposal based on that information."
145.
Similarly, in September 2014, a large wholesale customer reached out to several
large generic manufacturers, including Defendant Teva, asking them to submit a "Priority
Wishlist of items to gain increased volume in the market." The customer reported to Teva that
"7 of the global suppliers have created and submitted wishlists and that [the customer] will be
reviewing next week and taking a look at how they can move things around. He said they are
hoping to be able to horse trade without having to do ROFR [right of first refusal]."
146.
Further, in January 2015, Defendant Teva was in discussions with a large retail
customer about the possibility of becoming its supplier for Moexipril HCL HCTZ Tablets. The
customer stated "Yes, I would like a OTB [One Time Buy]. Can you provide pricing? And yes,
we should discuss an ongoing offer as well. I think you are way under your 'fair share' on this
one if I remember correctly."
147.
Customers at times also facilitate price increases, asking competitors to
"rationalize" a market by raising prices. For example, in November 2013, S.G., a senior account
executive at Sandoz, sent an internal e-mail stating "[a large wholesale customer] is indicating
that Glenmark and Caraco had taken a price increase on [a drug not identified in the Amended
Complaint] in June. [The customer] is asking if Sandoz will be rationalizing the market. . . .
Please advise on next steps. Our [lower] pricing is disrupting the market."
148.
The "fair share" agreement is not limited to any one market; these principles
constantly inform and guide the market actions that generic drug manufacturers decide to take
A44
(or not take) both within and across product markets. For example, in November 2013,
Defendant Dr. Reddy's won the "B" slot2 business at a large wholesale customer on a product not
identified in the Amended Complaint. Dr. Reddy's had previously won the "A" slot business at
that customer because Defendant Mylan had "walked away" from the business. J.A., a senior
account executive at Dr. Reddy's, sent an internal e-mail stating "My concern here is that
[Mylan] will retaliate somewhere else. I'm unsure of the $ volume, but this would pull
somewhere around 4% share from Mylan, and I don't think they would take that lying down."
149.
Similarly, in October 2013, CW-1, a senior pricing executive at Sandoz, sent an
internal e-mail, including to Defendant Kellum, stating that Sandoz had decided not to bid on
two drugs (Haloperidol and Trifluoperazine HCL – discussed more fully below in Section
IV.C.4.a.ii) at a large retail customer. CW-1 explained his reasoning as follows: "We have been
running up against Mylan a lot lately (Nadolol/Benaz/Hctz), and fear blowback if we take any
more products at this moment. Trying to be responsible in the sandbox." Similarly, in June
2014, Sandoz chose not to bid at a customer on the drug Benazepril HCTZ (discussed more fully
below in Section IV.C.4.a.ii) out of concern that Defendant Mylan would retaliate. As CW-1
explained, "I do not want to pursue, I believe this is due to a Mylan increase. We have a lot of
products crossing with Mylan right now, I do not want to ruffle any feathers." As discussed
more fully below in Section IV.C.4.a, these decisions were made by Sandoz executives as a
direct result of communications between the competitors, and in the context of an ongoing
understanding between Defendants Sandoz and Mylan to fix prices and avoid competition on a
number of different drugs, including Haloperidol, Trifluoperazine HCL, Nadolol and Benazepril
HCTZ, among others.
Some large customers contract with multiple suppliers – referring to them as primary ("A slot") or secondary ("B
slot") suppliers – so that in the event of a supply disruption for a particular drug, there is a secondary source of
supply.
2
A45
150.
A similar scenario occurred in August 2015, when Defendant Taro declined to bid
on Etodolac Extended Release (ER) Tablets at a large supermarket chain where Defendant Zydus
was the incumbent. Taro voiced concerns internally that Zydus might retaliate and take share
from them on another product, Warfarin Sodium Tablets. As C.L., an analyst at Taro, reasoned
in an internal e-mail, Zydus "could hit us on Warfarin. Not worth a fight in the sandbox over
300 annual units for Etodolac." As discussed more fully below, both Etodolac ER and Warfarin
were drugs where Taro had previously agreed with its competitors, including Teva and Zydus, to
fix prices and allocate customers in 2014. Taro's focus on playing nice in the sandbox was
merely an extension of those already-existing agreements.
151.
As these examples make clear, the interdependence among generic manufacturers
transcends product markets as these companies make decisions not only based on what impact
their actions will have in a given product market, but also on how those actions will impact other
product markets where the competitors overlap, and any future markets where they might
eventually compete.
152.
In fact, as explained in more detail below, certain Defendants had long-standing
agreements with some of their competitors to limit competition on any products on which the
companies overlapped. For instance, shortly after Defendant Patel was hired by Teva in 2013,
she reached out to CW-1 and asked how Sandoz handled price increases. Patel explained that
she had been hired by Teva to identify products where Teva could increase prices. CW-1 told
Patel that Sandoz would follow any Teva price increases and that Sandoz would not poach
Teva's customers after Teva increased price. CW-1 reiterated his conversation to Defendant
Kellum, who understood and approved.
153.
Indeed, generic manufacturers often communicated about, and colluded on,
multiple drugs at any given time. As just one example, in July 2013, Defendant Teva increased
A46
pricing on a list of 21 different products. There was a great deal of internal pressure from
management at Sandoz – including from Defendant Kellum and CW-1 – to obtain a copy of the
Teva price increase list. As a result, CW-2 (then a Sandoz employee) reached out to his former
colleague, Defendant Rekenthaler, the Vice President of Sales at Teva, to obtain a copy of the
full Teva price increase list. Defendant Rekenthaler forwarded the list to his own personal email address before then forwarding it to CW-2's personal e-mail address. Upon receiving the
list, CW-2 read it to his supervisor – CW-1 – over the phone. Notably, the Teva list included a
number of products that Defendant Sandoz did not even sell.
154.
It was not uncommon for generic manufacturers to communicate with each other
about products that they did not sell. In another example, Defendants Teva, Wockhardt, and
Mylan collusively raised pricing on Enalapril in July 2013 (discussed more fully below). After a
lengthy conversation with Defendant Patel in the midst of the price increases, Defendant
Aprahamian of Taro (not in the market for Enalapril at that time) sent an internal e-mail,
including to M.P., a senior Taro executive, stating "[t]here has been some significant changes in
the market landscape with this product and I'd like to get product back in Taro label (and fast)."
And Taro did move fast. By December 2013, Aprahamian spoke again with Defendant Patel,
M.A., an account manager at Defendant Mylan, and M.C., a senior sales and marketing
executive at Defendant Wockhardt. Taro then re-entered the Enalapril market and matched
competitor pricing.
155.
In another example, on January 1, 2013 – the day before a substantial Mylan price
increase on a number of items – Defendant Green of Teva spoke five (5) times with Defendant
Nesta of Mylan. The next day, Defendant Green spoke with Defendant Kellum of Sandoz.
Defendant Kellum then sent an internal e-mail to the Sandoz team stating "[j]ust heard from a
customer that – Teva and Mylan . . . have raised price on Nadolol to our levels and Mylan took a
A47
significant price increase on Levothyroxine. Let's please be cautious on both these products."
Despite that fact that Teva did not sell Levothyroxine, Green still conveyed to Sandoz that Mylan
raised price on that product.
156.
Unlike their branded counterparts, generic drugs are commodities and generic
manufacturers are constantly making decisions to enter new markets and leave existing markets.
Often these decisions are made, at least in part, based on who the competitors are and how strong
the relationship is between the two companies. As one example, in July 2013, Defendant Sandoz
was looking to implement a "Taro Strategy" that involved temporarily delisting ten products that
they overlapped on with Defendant Taro. This strategy would allow Taro to raise price on these
products while Sandoz was out of the market, and then Sandoz could re-enter later at the higher
price.
157.
This interdependence between generic manufacturers is further demonstrated by
the countless examples of companies sharing sensitive information with competitors as a matter
of course. The Plaintiff States have gathered evidence going back more than a decade of generic
companies routinely communicating and sharing information with each other about bids and
pricing strategy. This includes forwarding bid packages received from a customer (e.g., a
Request for Proposal or "RFP") to a competitor, either on their own initiative, or at the request of
a competitor.
158.
Defendants and other generic drug manufacturers also share information among
themselves regarding the terms of their contracts with customers, including pricing terms, price
protection and rebates. Defendants use this information to negotiate prices or terms that are
more favorable to them, often to the ultimate detriment of payors and consumers. For instance,
in December 2013, Defendant Teva was negotiating new price increase language in its customer
contracts, and wanted some comfort that its competitors had similar language. On December 23,
A48
2013, Defendant Rekenthaler spoke with Defendant Nesta of Mylan three times, including a
thirteen (13) minute call. Immediately after hanging up the phone with Nesta after the third call,
Rekenthaler sent the following e-mail:
From:
Sent:
Oave Rekenthaler
Mon 121:23/2013 10 :41 AM (GMT-05:00)
To:
Maureen Cavanaugh
Nisha Patel02
Cc:
Bee:
Subjoct: RE: Proposed Prico lncrcaso Languago
Mylans language is vague. "Pricing subject to cbange at Mylan's sole discretion."
159.
Defendants were well aware that what they were doing was illegal and took steps
to cover up evidence of the overarching conspiracy. For example, in May 2014, a large customer
of Taro’s received a bid on a product not identified in the Amended Complaint and gave Taro an
opportunity to bid to retain the business. A.L., a senior contracting executive at Taro, sent an
internal e-mail stating "FS ok, will not protect." E.G., a senior managed care executive at Taro,
responded "explain FS, (Fair Share)?" Defendant Aprahamian replied:
No emails please. Phone call. -
let's discuss.
Similarly, handwritten notes from an internal Sandoz business review presentation from May
2017 – after the States' investigation was well underway – read: "Avoid Fair Share terminology
on slides – underdeveloped or overdeveloped is better."
160.
To avoid creating a potentially incriminating paper trail, Defendant Kellum of
Sandoz routinely admonished colleagues for putting information that was too blatant in e-mails,
understanding that it could lead to significant legal exposure for both the company and the
individuals involved.
161.
It bears noting that the examples referenced in this section, and in the sections that
follow, include only illustrative examples of the types of conduct described. Indeed, to date,
A49
many of the Defendants have made no document productions in connection with the Plaintiff
States’ investigation, including Defendants Amneal, Apotex, Breckenridge, Glenmark, Lupin,
and Zydus, and several other Defendants have made only limited productions focused on
particular drugs or custodians, including Actavis, Mylan, Par, and Wockhardt. Even Teva, the
central figure in this Complaint, has to date only produced documents from two custodians to the
Plaintiff States.
**********
i.
168.
Fenofibrate
Fenofibrate—also known by brand names such as Tricor—is a medication used to
treat cholesterol conditions by lowering “bad” cholesterol and fats (such as LDL and
triglycerides) and raising “good” cholesterol (HDL) in the blood.
169.
As of the end of 2012, Teva and Lupin were the only major suppliers of generic
Fenofibrate 48mg and 145mg tablets, with Teva having approximately 65% market share and
Lupin having approximately 35% market share.
170.
On February 27, 2013, K.G., a senior marketing executive at Teva, e-mailed
multiple Teva colleagues asking them to provide “any noise you may be hearing in the market
relative to additional competition on Fenofibrate 48mg and 145mg.” Specifically, K.G. was
seeking “Competitive Intelligence” on Mylan’s potential entry to the market. In order to get this
information, Defendant Green called Mylan’s Vice President of National Accounts, Defendant
Jim Nesta. Over the course of that day, Green and Nesta spoke at least four (4) different times.
That same day, Green reported back to K.G. and other Teva colleagues what he had learned:
Mylan planned to launch Fenofibrate 48mg and 145mg sometime around November 2013.
171.
A few months later, however, Teva learned that Mylan was moving up its launch
date for Fenofibrate. In advance of this launch, Teva, Lupin, and Mylan conspired to allocate the
A50
market for Fenofibrate. On May 8, 2013, Defendant Green e-mailed his colleagues at Teva that
“Mylan is entering [the market for Fenofibrate] very soon.” To assist in Teva’s efforts to
allocate the Fenofibrate market, Green asked a colleague for the “typical data on Fenofibrate.”
This request for information was reiterated—and its purpose made clear—the following day
when K.G. sent an internal e-mail stating that Mylan expected to launch Fenofibrate 48mg and
145mg tablets “on or around May 14” and that he needed Teva's Fenofibrate sales and
profitability information “to determine who we want to keep and who we want to concede” to
Mylan.
172.
Up to this point, executives for Teva, Mylan, and Lupin had all been in regular
contact by phone. These calls include at least those listed below. On these calls, Teva, Mylan,
and Lupin executives shared information about Mylan’s Fenofibrate launch and the plan to
allocate market share to Mylan.
1[11 Direction 1[11 Contact Name
1[11 Duration 1[11
Date 1[11 Call Type1[11 Target Name
5/6/2013
Voice
Patel, Nisha (Teva)
Outgoing Berthold, David (Lupin)
0:00:32
5/6/2013
Voice
Patel, Nisha (Teva)
Incoming IBerthold, David (Lupin) I
0:22:02
5/6/2013
Voice
Green, Kevin (Teva) Outgoing Berthold, David (Lupin)
0:01:00
5/7/2013
Voice
Patel, Nisha (Teva)
Incoming IBerthold, David (Lupin) I
0:10:31
5/7/2013
Voice
Nesta, Jim (Mylan)
Outgoing Green, Kevin (Teva)
0:00:06
5/7/2013
Voice
Nesta, Jim (Mylan)
Incoming IGreen, Kevin (Teva)
I 0:00:18
5/7/2013
Voice
Nesta, Jim (Mylan)
Outgoing Green, Kevin (Teva)
0:11:12
5/7/2013
Voice
Nesta, Jim (Mylan)
Outgoing IBerthold, David (Lupin) I
0:02:53
5/8/2013
Voice
Nesta, Jim (Mylan)
Incoming Berthold, David (Lupin)
0:00:05
5/8/2013
Voice
Nesta, Jim (Mylan)
Outgoing IBerthold, David (Lupin) I
0:08:55
5/8/2013
Voice
Nesta, Jim (Mylan)
Outgoing Green, Kevin (Teva)
0:00:20
5/8/2013
Voice
Nesta, Jim (Mylan)
Incoming IGreen, Kevin (Teva)
0:00:05
I
5/8/2013
Voice
Nesta, Jim (Mylan)
Outgoing Green, Kevin (Teva)
0:00:05
5/8/2013
Voice
Nesta, Jim (Mylan)
Incoming IGreen, Kevin (Teva)
I 0:03:46
5/9/2013
Voice
Green, Kevin (Teva) Outgoing Berthold, David (Lupin)
0:01:00
5/9/2013
Voice
Green, Kevin (Teva) Incoming IBerthold, David (Lupin) I
0:12:00
5/9/2013
Voice
Nesta, Jim (Mylan)
Incoming Green, Kevin (Teva)
0:04:05
173.
In one striking example of the coordination between the three companies,
Defendant Nesta called Defendant Green at 2:42pm on May 7 and they spoke for more than
eleven (11) minutes. Immediately after hanging up the phone – at 2:54pm – Nesta called
Defendant Berthold and spoke for nearly three (3) minutes.
A51
174.
On May 10, 2013, K.G. received the Teva sales and profitability information he
requested. After having the information for barely a half hour, and before there was even a
formal price challenge by Mylan at any of Teva’s customers, K.G. concluded that “it is best to
concede Econdisc [to Mylan] and try to maintain the balance of our customers . . . .” By
conceding Econdisc to Mylan, Teva would walk away from its single biggest customer (in terms
of gross profit) for the 48mg tablets and the third largest out of six customers (in terms of gross
profit) for the 145mg tablets. Defendant Patel, who had been at Teva for only two weeks at that
point, said she “want[ed] to understand the logic you [K.G.] use for determining this.” The
logic, of course, was to allocate a customer of sufficient size to Mylan so that Mylan would be
comfortable with its “fair share” and not need to compete on price to acquire market share.
175.
Teva executives immediately reached out to executives at Mylan and Lupin
through a series of phone calls. These calls include at least those listed below. On these calls,
executives of Teva, Mylan, and Lupin confirmed the market allocation scheme.
Date
Call Type
5/10/2013 Voice
5/10/2013 Voice
5/10/2013 Voice
5/10/2013 Voice
5/10/2013 Voice
5/10/2013 Voice
5/10/2013 Voice
176.
Target Name
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Direction
Outgoing
Incoming
Incoming
Outgoing
Outgoing
Incoming
Incoming
I
I
1
1
I
I
Contact Name
Duration
Green, Kevin (Teva)
0:00:28
Green, Kevin (Teva)
0:10:46
Green, Kevin (Teva)
0:02:19
Patel, Nisha (Teva)
0:05:25
Berthold, David (Lupin)
0:00:17
Berthold, David (Lupin)
0:07:26
Berthold, David (Lupin)
0:17:28
I
I
I
Teva made good on its agreement to concede Econdisc to Mylan. On May 15,
2013, Econdisc informed Teva that a new market entrant had submitted a competitive offer for
Fenofibrate 48mg and 145mg tablets and asked Teva for a counteroffer to retain Econdisc’s
business. Less than an hour after receiving the notice of the price challenge, Defendant Green
recommended conceding Econdisc based on “prior conversations.” K.G. later agreed: “this is
the customer we should concede on Fenofibrate.”
A52
177.
Following Teva’s internal confirmation of the market allocation scheme, Teva
executives spoke with executives at Mylan and Lupin numerous times. These calls include at
least those listed below. On these calls, executives of Teva, Mylan, and Lupin confirmed that
Teva was sticking to the market allocation scheme by conceding Econdisc to Mylan.
Date
Call Type
5/16/2013
Voice
5/16/2013
Voice
5/16/2013
Voice
5/16/2013
Voice
5/16/2013
Voice
5/16/2013
Voice
5/16/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Voice
5/17/2013
Text
5/17/2013
Voice
Target Name
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Berthold, David (Lupin)
Berthold, David (Lupin)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Nesta, Jim (Mylan)
Direction
Outgoing
Incoming
Incoming
Incoming
Incoming
Outgoing
Outgoing
Outgoing
Incoming
Outgoing
Incoming
Outgoing
Outgoing
Incoming
Outgoing
Incoming
Outgoing
Outgoing
Incoming
Contact Name
Duration
Berthold, David (Lupin)
0:00:36
Berthold, David (Lupin) I
0:02:07
Berthold, David (Lupin)
0:00:07
Berthold, David (Lupin) I
0:03:12
Berthold, David (Lupin)
0:00:04
Berthold, David (Lupin) I
0:05:29
Berthold, David (Lupin)
0:00:34
I
Nesta, Jim (Mylan)
0:02:21
Green, Kevin (Teva)
0:10:06
Green, Kevin (Teva)
0:00:04
I
Green, Kevin (Teva)
0:11:50
Green, Kevin (Teva)
0:02:23
I
Berthold, David (Lupin)
0:00:09
Berthold, David (Lupin) I
0:00:21
Berthold, David (Lupin)
0:11:12
Green, Kevin (Teva)
0:04:25
I
Green, Kevin (Teva)
0:00:05
Green, Kevin (Teva)
0:00:00
I
Green, Kevin (Teva)
0:16:02
*********
187.
Mylan and Teva maintained regular contact as former Mylan customers came to
Teva because of Mylan’s supply issues with Clonidine-TTS. For example, Teva submitted bids
to CVS and Wal-Mart—which were ultimately accepted by those companies—on October 4,
2012 and October 5, 2012, respectively. In the days leading up to those bids, Teva and Mylan
representatives had at least the following phone calls:
Date
Call Type Target Name
10/1/2012 Voice Rekenthaler, David (Teva)
10/1/2012 Voice Nesta, Jim (Mylan)
10/1/2012 Voice Nesta, Jim (Mylan)
10/1/2012 Voice TNesta, Jim (Mylan)
10/1/2012 Voice Nesta, Jim (Mylan)
10/4/2012 Voice Green, Kevin (Teva)
I
I
Direction
Outgoing
Incoming
Outgoing
Incoming
Outgoing
Incoming
Contact Name
B.P. (Mylan)
Green, Kevin (Teva)
Green, Kevin (Teva)
Green, Kevin (Teva)
Green, Kevin (Teva)
Nesta, Jim (Mylan)
Duration
0:01:00
0:00:10
0:00:04
0:00:06
0:05:00
0:11:00
**************
i.
496.
Baclofen
Baclofen, also known by the brand names Gablofen and Lioresal, is a muscle
A53
relaxant used to treat muscle spasms caused by certain conditions such as multiple sclerosis and
spinal cord injury or disease. It is generally regarded as the first choice of physicians for the
treatment of muscle spasms in patients with multiple sclerosis.
497.
In June 2014, Defendant Lannett was preparing to re-enter the market for
Baclofen, but was faced with limited supply. In an internal e-mail sent to his sales staff, K.S., a
senior sales executive at Lannett, stated: "Baclofen launch in four weeks, need market
intelligence. We can only take a 10% market share." At that time, Teva had a large market
share in relation to the existing competitors in the market.
498.
Defendant Sullivan, a Director of National Accounts at Lannett and a recipient of
the e-mail, promptly communicated with Defendant Patel (Teva was a competitor for Baclofen)
using Facebook Messenger. On June 12, 2014, Sullivan messaged Patel, stating:
r-ft
Hi Nisha,
Helo there! How are you?
I was hoping to touch base
with you about some industry
news. What is your cell
phone? Or could you give me
a call when you have a
minute•..
The message was sent at 11:16am. At 11:30am, Defendant Patel called Defendant Sullivan and
they spoke for seven (7) minutes. This was the first phone conversation between Sullivan and
Patel since Patel had joined Teva in April 2013. During the conversation, Defendant Sullivan
informed Defendant Patel that Lannett would be entering the market for Baclofen shortly. In a
follow-up message through Facebook Messenger later that afternoon, Sullivan confirmed:
Definitely Mid July.. I'll touch
base with you in a few weeks.
A54
499.
True to her word, Defendant Sullivan called Defendant Patel on July 1, 2014 and
left a voicemail. Patel promptly returned the call, and the two spoke for almost seven (7)
minutes.
500.
On July 11, 2014, as Teva was evaluating future forecasting and whether to try
and take on additional Baclofen business with a large wholesaler, Patel stated to a Teva
colleague: "[n]ot sure if it helps your review, but there is another entrant coming to market
(Lannett). I'm not sure about their share targets, but I know it's probably soon." That same day,
Patel sent a text message to Sullivan asking "Around?" Sullivan immediately called Patel and
left a voicemail. Patel called Sullivan back promptly, and they spoke for more than three (3)
minutes. After speaking, Patel sent another text message to Sullivan, stating: "Thank you!!"
Sullivan responded: "No prob!"
501.
Shortly thereafter, on July 22, 2014, Teva was approached by a customer stating
"[w]e were contacted by another mfg that is going to be launching Baclofen in the coming
weeks." The customer asked whether Teva wanted to exercise its right of first refusal (i.e., offer
a lower price to maintain the account). Even though the new manufacturer's price was only
slightly below Teva's price, Teva declined to bid. Defendant Patel specifically agreed with the
decision to concede, stating "I believe this is Lannett." Teva's internal tracking database noted
that the customer had been conceded to a "Strategic New Market Entrant."
502.
Teva had significantly increased its price for Baclofen in April 2014 (following an
Upsher-Smith price increase), and was able to maintain those prices even after Lannett entered
the market a few months later. In fact, when Lannett entered the market it came in at the exact
same WAC price as Teva.
************
A55
542.
As early as 2012, Teva was speaking to competitors about the drug Nadolol.
543.
Nadolol, also known by the brand name Corgard, is a "beta blocker" which is
used to treat high blood pressure, reducing the risk of stroke and heart attack. It can also be used
to treat chest pain (angina).
544.
In 2012 and 2013, Teva's only competitors for Nadolol were Mylan and Sandoz.
All three companies experienced supply problems of some sort during that time period, but they
were in continuous communication to coordinate pricing and market allocation in order to
maintain market stability. Nadolol was a high volume drug and one of the most profitable drugs
where Teva, Mylan and Sandoz overlapped, so it was very important that they maintain their
coordination.
545.
Teva's relationships with Mylan and Sandoz are discussed more fully below, but
by 2012 an anticompetitive understanding among those companies was firmly entrenched.
546.
Teva raised its price on Nadolol on July 31, 2012. In the days leading up to that
increase – following a pattern that would become routine and systematic over the following years
– Defendant Kevin Green, at the time in the sales department at Teva, was in frequent
communication with executives at both Sandoz and Mylan. Green spoke to CW-2 from Sandoz
twice on July 29, 2012, and again on the day of the price increase, July 31, 2012. Similarly,
Defendant Green was communicating with Defendant Nesta of Mylan often in the days leading
up to the increase, including five (5) calls on the day of the price increase.
547.
Sandoz followed with its own increase on August 27, 2012. The increases were
staggering – varying from 736% to 798% depending on the formulation. The day before the
Sandoz increase, Defendant Armando Kellum, then the Senior Director of Pricing and Contracts
at Sandoz, called Defendant Green. They had also spoken once earlier in the month, shortly after
the Teva increase. CW-2 also called Green twice on August 21, 2012 – the same day that
A56
Sandoz requested approval from its Pricing Committee to raise the Nadolol price. The day after
the Sandoz increase, Defendant Green – acting as the conduit of information between Sandoz
and Mylan – called Nesta of Mylan twice, with one call lasting fourteen (14) minutes.
548.
Mylan, which returned to the market after a brief supply disruption, followed the
Teva and Sandoz increases on January 4, 2013. In what had become a routine component of the
scheme, the day before the Mylan increase Nesta spoke to Green four (4) times. The next day,
Defendant Green conveyed the information he had learned from Defendant Nesta directly to his
counterpart at Sandoz. On January 4, 2013 – the day of the Mylan increase – Defendant Green
called Defendant Kellum twice in the morning, including a six (6) minute call at 9:43am.
Shortly after hanging up with Green, Kellum reported internally on what he had learned – but
concealing the true source of the information – a convention that was frequently employed by
many Sandoz executives to avoid documentation of their covert communications with
competitors:
Just heard from a customer thal
• Teva and Mylan raised have now raised price on Nadolol to our levels
and
Mylan look a signrficant price inaease on Levothryoxine
Let's please be cautious on bolh of lhese products.
Thanks
Being "cautious" on those products meant that Sandoz did not want to steal business away from
its competitors by offering a lower price and taking their market share.
549.
Defendant Kellum's phone records demonstrate that he did not speak with any
customers during the morning of January 4, 2013. At 11:50am the same morning, Defendant
Green also called CW-2 at Sandoz and they spoke for fifteen (15) minutes.
A57
550.
Significantly, Defendant Green was not speaking with his Sandoz contacts solely
about Nadolol, the common drug between Teva and Sandoz, but was also conveying information
to Sandoz about a Mylan price increase on another drug that Teva did not even sell –
Levothyroxine. Such conversations further demonstrate the broad, longstanding agreement
among each of these competitors to share market intelligence in order to facilitate the scheme.
551.
To put the Nadolol price increases into context, the Connecticut Attorney
General's Office received a complaint from a Connecticut resident who has been prescribed
Nadolol for approximately the last 15 years. In or about 2004, that individual paid between $10
and $20 in out-of-pocket costs for a 90-day supply of Nadolol. Today, that same 90-day supply
of Nadolol would cost the complainant more than $500.
552.
As discussed more fully below, Teva continued to conspire with Mylan and
Sandoz about Nadolol and many other drugs throughout 2013 and into the future.
*******************
i.
581.
The “High Quality” Competitor Relationships
The highest quality competitors in Defendant Patel's rankings were competitors
where Teva had agreements to lead and follow each others' price increases. The agreements and
understandings regarding price increases were what made each of those competitors a high
quality competitor. As part of their understandings, those competitors also agreed that they
would not seek to compete for market share after a Teva price increase.
582.
Mylan was Teva's highest-ranked competitor by "quality." The relationship
between these two competitors was longstanding, and deeply engrained. It survived changes in
personnel over time, and pre-dated Defendant Patel's creation of the quality competitor rankings.
583.
Defendant Kevin Green, who was employed by Teva beginning in 2006 through
late October 2013, first began communicating with Defendant Jim Nesta of Mylan by telephone
A58
on February 21, 2012. From that time until the time that Defendant Green left Teva, Defendants
Green and Nesta were in almost constant communication, speaking by phone at least 392 times,
and exchanging at least twelve (12) text messages – including at or around every significant
price increase taken by either company. This amounts to an average of nearly one call or text
message every business day during this period.
584.
Shortly after Defendant Patel started her employment at Teva, she called
Defendant Nesta on May 10, 2013 and the two spoke for over five (5) minutes. Because
Defendant Green had already established a relationship with Mylan, Patel did not need to speak
directly with Defendant Nesta very often. Typically, Patel would e-mail Green and ask him to
obtain market intelligence about certain Mylan drugs; Green would then speak to Nesta – often
about a long list of drugs – and report his findings back to Patel. Several examples of these
communications are outlined more fully in various sections below.
585.
When Defendant Green left Teva to join Zydus in late October 2013, the
institutional relationship and understanding between Teva and Mylan remained strong.
Defendant Rekenthaler promptly took over the role of communicating with Defendant Nesta.
Starting in December 2013, through the time that Defendant Rekenthaler left Teva in April,
2015, Rekenthaler spoke to Nesta 100 times. Prior to Defendant Green leaving Teva in lateOctober 2013, Defendants Rekenthaler and Nesta had only spoken by phone once, more than a
year earlier in 2012.
586.
The relationship between Teva and Mylan even pre-dated the relationship
between Defendants Green and Nesta. For example, between January 1, 2010 and October 26,
2011, R.C., a senior executive at Teva, communicated with R.P., a senior executive counterpart
at Mylan, by phone or text at least 135 times. The pace of communications between the two
companies slowed dramatically in November 2011 after R.C. left Teva and before Green began
A59
communicating with Nesta – but continued nevertheless as needed during that time through
communications between Defendant Rekenthaler and R.P. at Mylan.
************
g.
626.
July 3, 2013 Price Increases
Teva implemented its first formal set of price increases using Patel's high-quality
competitor formula on July 3, 2013, relating to twenty-one (21) different generic drugs. Many of
the drugs slated for price increases were from the May 24, 2013 "Immediate PI File," but several
others had been added in the interim. Patel scheduled a conference call for the day before the
price increases to discuss those increases with members of Teva's sales and pricing departments:
Price I ncre ase - Agen da
Date and
l ocation
M C:U-'CC
TU<>Sdoy. July 02. 2013 11:00 AM • 11: 30 AM. Coll In Number Below/Dave•, Office
We arc currently prcp,;1rin.s: to announce~ price lnac~ effective: Wcdncsd;ty, 7/3,/13. Tho list Includes scvcriJI itcm5. I w.anted t o
t.1kc some t ime to do.> qukk review of the item 11st .:and answer am, q~tions you may h.iW':.
Oat In: 866- 225~0660
A«•ss Code: 4075453
1) Pr ice increase effective Wednesday, 7/3/2013
2)
List of items affected:
P r oduc t Family
AMPALSEGB. Total
CB'ACLOO ER TABLETS Total
CEFAOROXIL TABLETS Total
CEFDINIRCAPSULES Total
CEFDINIRORAL SUSP8"SIOH To t
CIFPROZIL TABLETS T o t :;.I
CS)HALEXIN TA8LETS Totel
CIMETIOINE TABLETS Totol
R.UCONAZOLETA IILETS Total
R..UOCINONOECREAM E Totol
R.UOCINONOECREAM Total
FLUOCINONOEGB. To tal
R.UOCINONOEOINTMINT Total
M ETHO~TE T A llt.ETS Total
M OEXIPRN.. HCL TABLETS T ot•I
M OEXIPAL HCUHCTZ T A BLETS
NABUM ETON: T A.Bl..ETS Total
NAOOLOL T A8LErS T ot al
OXYBOTVNIN C HLOAIOE TABLET
PAA.ZOS.N HCL CA PSll.ES T otal
AANITIOINEHCL T ABLETS To t al
C u stomers
Affected
All
All
All
Al l
All
All
All
All
All
All
All
All
All
All
All
All
All
All less Ccondisc
All
All
All
SWP
Change
ves
yes
WAC
Ch ange
% ASP
lnaease
(not ac:tual 1nc)
95'6
25'6
25'6
122'6
52().620'6
yes
yes
yes
yes
yes
yes
yes
ves
ves
yes
yes
yes
yes
ves
ves
yes
yes
yes
yes
55-95%
95'6
200-800')6
875-1570'6
10'6
15%
1S9'
17"
500- 1800')6
300-560%
70.175%
14().160,6
1200-1400'6
1100-150()%
30'6
33().900%
A60
Following the now-established pattern, Defendants Patel and/or Green spoke to every important
competitor in the days and weeks leading up to the July 3, 2013 Teva price increase to coordinate
the increases and reiterate the understanding already in place with those competitors.
627.
The following graphic details some of the calls between Teva representatives and
Teva's competitors in the days and weeks leading up to the July 3, 2013 price increase; color
coded to show the calls with specific competitors relating to each drug:
M Ian:
On 6/26, Green and Nesta speak for
one hour and 25 seconds. On 6/27,
they speak twice (1 :03 and 4:20);
aft er the second call, Green
immediately calls Patel and speaks
for 8:27. On 6/28, Green and Nesta
speak for 3:53 at 10:59am. Green
calls Nesta on 7/2, but is unable to
connect. Nesta ret urns the call on
7/3/13 (the day of the ltY<l
increase), and they speak for 14 :39
2} Us1 of l1ems offected:
Product Family
ADU'ALOIUB. ToW
All
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ves
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The only drugs that Defendants Patel or Green did not coordinate with Teva's competitors (those
not highlighted in the graphic above) were drugs where Teva was exclusive – i.e., had no
competitors.
628.
Defendant Patel – and other executives at Teva – went to great efforts to
coordinate these price increases with competitors prior to July 3, 2013. Some illustrative
examples of generic drugs that were added to the list after May 24, 2013 are set forth in more
detail below.
A61
***********
637.
The next day, May 7, 2013, Defendant Green spoke to Defendant Nesta at Mylan
three times, including one call lasting more than eleven (11) minutes. Defendant Green also
called Defendant Patel twice that day to report on what he had learned. Defendants Green and
Nesta also spoke a number of times over the next several days, including on May 8 (3:46), May 9
(4:05) and May 10, 2013 (0:28; 10:46 and 2:19).
********
iii.
769.
Actavis (Clarithromycin ER Tablets, Tamoxifen Citrate
and Estazolam
Teva and Actavis were coordinating about several drugs increased by Teva on
April 4, 2014. One of them was Clarithromycin ER Tablets. As of December 2013, Teva,
Actavis and Zydus were the only three generic manufacturers actively selling Clarithromycin
ER.
770.
On December 30, 2013, however, Cardinal approached Teva looking for a bid on
Clarithromycin ER because Zydus was exiting the market. Teva informed Cardinal that it would
not have adequate supply to be able to take on this additional market share until April 2014, but
if Cardinal could wait until then for Teva to supply, Teva would make an offer. Cardinal agreed.
771.
The Cardinal bid request was forwarded to Defendant Patel on the morning of
January 2, 2014. At 9:37am that morning, L.R., a customer marketing manager at Teva,
suggested providing an offer to Cardinal at "10% under market intel pricing for [the]
Watson/Actavis product." L.R. also stated: "[i]f Cardinal is willing to wait until April, I suspect
that Actavis isn't interested in picking up a lot of additional share."
772.
Immediately after receiving that e-mail, at 9:40am, Defendant Patel called
Defendant Rogerson at Actavis and the two spoke for more than seventeen (17) minutes. Shortly
A62
after hanging up the phone with Defendant Rogerson, at 10:12am, Defendant Patel responded to
the e-mail, saying: "I think we have an opportunity to go higher. Let's aim for around $148 net
and request feedback."
773.
On January 9, 2014, Teva learned that Cardinal had accepted Teva's bid at the
higher price. At 9:19am that morning, Defendant Patel called Defendant Rogerson at Actavis
and they spoke for more than six (6) minutes. Shortly after that call, at 9:45am, Patel sent an email internally at Teva stating: "It looks like Cardinal accepted our bid at the higher price. We
may have an opportunity to take some increases."
774.
When Defendant Patel sent her supervisor the initial list of "Increase Potentials
Q1 2014" on January 14, 2014, Clarithromycin ER was on the list.
775.
Similarly, in March, 2014, Actavis implemented its own price increase on several
other drugs, including some that overlapped with Teva. Consistent with the ongoing
understanding between these high-quality competitors, Actavis understood that Teva would
follow the increases or, at a minimum, would not poach Actavis customers after the increase.
776.
Following a now very familiar pattern, at 9:54am on March 14, 2014 Defendant
Rogerson called Defendant Patel and left a message. Patel called Rogerson back at 10:31am,
and the two spoke for more than twelve (12) minutes. Within minutes after hanging up with
Rogerson, Patel informed others at Teva about the Actavis increase:
NAM$.
I'm Ix~ tlu.1 A<:ta\·is annovn<:ed • bl.inch ol'pri<:c: incn:~ )tstmby, Plca,;c: 5br.Jn: U1Y fotc:I you gathct-. I
believe some ofthe produdJ.. thal o,-crtap wilh Teva, arc u lollow.1 (not ~tit i( thm:: arc any mo~):
T1mo,;i(cn
A63
In actuality, these increases would not become effective until April 15, 2014, again
demonstrating that Teva knew in advance of its competitors' price increase plans.
777.
Within half an hour of sending that e-mail, Defendant Patel instructed colleagues
to add the Actavis drugs to the Teva price increase list. She added: "We intend to follow where
we can."
778.
Less than two hours later, at 12:37pm, Defendant Patel called Defendant
Rogerson again. They spoke for more than five (5) minutes. Shortly after hanging up the phone,
at 12:51pm, Patel wrote another e-mail to certain colleagues at Teva, stating: "Actavis took an
increase. We will follow. We need to review price per my alert list. Let's wait to see what intel
we can get and discuss Monday."
779.
First thing the next business day – which was the following Monday, March 17,
2014 – Defendant Patel forwarded the "PI Candidates" list to K.G. at Teva. The list included
both Tamoxifen Citrate and Estazolam. Later that morning, Defendant Patel called Defendant
Rogerson. After quickly exchanging voicemails, they spoke for more than nineteen (19)
minutes. Defendants Rekenthaler of Teva and Falkin of Actavis also exchanged four (4) text
messages that day, and had one call lasting more than six (6) minutes.
780.
Teva followed the Actavis price increases on Tamoxifen Citrate and Estazolam
less than three weeks later, on April 4, 2014. Defendants Patel and Rogerson spoke twice by
phone that day. Defendants Rekenthaler and Falkin also spoke by phone that day. Because Teva
was able to follow the price increase so quickly, Teva's increase became effective even before
the Actavis price increase for those drugs.
781.
After the price increases became effective, Teva took consistent steps not to
disrupt the market or steal market share from Actavis. For example, on May 14, Defendant Patel
declined to bid at ABC on both Tamoxifen Citrate and Estazolam, stating: "unable to bid
A64
(strategic reasons, for internal purposes)." When Defendant Patel and her other conspirators at
Teva used the term "strategic" in this context, it was code for the fact that there was an
understanding in place with a competitor.
782.
Similarly, on May 21, 2014, Teva received a request from a large customer for a
bid on Tamoxifen Citrate. As of that date, Teva had 58.4% of the market, and Actavis had
40.7%. A Teva analyst forwarded the request to Defendant Patel and others, recommending
(pursuant to the fair share understanding in the industry) that Teva not bid "as we are first in a
two-player market with good share already." Defendant Patel responded: "Agree. We should
decline to bid."
**************
o.
847.
August 28, 2014 Price Increases
On August 28, 2014, Teva raised prices on a number of different drugs, including
those set forth below:
Competitors
Product Description
% WAC
Increase
AMILORIDE HCL/HCTZ TABLETS
Mylan (88%)
AMOXICILLIN/CLAV CHEW TABLETS
Sandoz (34%)
25%
CARBAMAZEPINE CHEWABLE TABLETS
Taro (59%); Torrent (24.9%)
270%
CARBAMAZEPINE TABLETS
Taro (52%); Torrent (3.2%); Apotex (3%)
1538%
CIMETIDINE TABLETS
Mylan (58%); Apotex (0.4%)
25%
CLEMASTINE FUMARATE TABLETS
Sandoz (13%)
45%
CLOTRIMAZOLE TOPICAL SOLUTION
Taro (54%)
208%
DESMOPRESSIN ACETATE TABLETS
Actavis (43%)
75%
DICLOFENAC POTASSIUM TABLETS
Mylan (37%); Sandoz (13.5%)
50%
DISOPYRAMIDE PHOSPHATE CAPSULES
Actavis (47%)
100%
ENALAPRIL MALEATE TABLETS
Mylan (30%); Wockhardt (22.5%)
230%
EPITOL TABLETS
Taro (52%); Torrent (3.4%); Apotex (3%)
1538%
FLURBIPROFEN TABLETS
Mylan (41%)
75%
FLUTAMIDE CAPSULES
Par (33%); Actavis (26.8%)
140%
FLUVASTATIN SODIUM CAPSULES
Mylan (82%)
32%
HYDROXYUREA CAPSULES
Par (64%)
37%
LOPERAMIDE HCL CAPSULES
Mylan (56%)
25%
PENICILLIN VK TABLETS
Sandoz (26%); Northstar (5.3%); Dava (4%); Aurobindo (3.6%); Greenstone (2%)
100%
PRAZOSIN HCL CAPSULES
Mylan (71%); Mylan Inst. (0.5%)
21%
PROCHLORPERAZINE TABLETS
Mylan (35%); Cadista (30.3%); Sandoz (11%); Mylan Inst. (0.3%)
0%
TOPIRAMATE SPRINKLE CAPSULES
Zydus (81%); Actavis (3.5%)
0%
WARFARIN SODIUM TABLETS 10MG 100
Taro (57%); Zydus (16.2%); Upsher-Smith (5%); Amneal (0.4%);
5%
50%
Following the normal pattern, in the days and weeks leading up to the price increase, Defendants
Patel and Rekenthaler were communicating with every high-quality competitor on those drugs to
A65
coordinate the increases in advance. At least some of those communications are set forth in the
graphic below:
Mylan .
Rekenthaler speaks to Nesta on
8/11 (3 calls), 8/18 (2 calls) and
8/21
Taro.
Patel speaks to Ap rahamian on
8/18 and 8/27
CofT1)etitors
ProductDfo"ll:ript ion
f-AM_,_,o_"___
"---"---'"-"---m=r•---"---"'=:------jMyl!Vl (88")
AMOX ICllUN/ CLAVCHEW TABLETS
~ntlOil 134")
7 raro(59%), arent [24.9%)
f-CAR=BAM=AZE::cP::INE::-T:::A8:-L_ET_S_ _ _ _7 Taro(52"). trrerw: (32%); A?Ct-eic(3")
e-''"='AM------AZE::P--IN=-EC::>£:::-W=A:-BL_ET_A_"-_ET_s_ _
f-::::;M---::::~:;;
11:,:-T;::-F::-:lE-:;;:::AT;;-E;:TA-;;;O.,c;ETS;:------j MVIIVl(S8");fPOte11:{0.4")
f-,cc
oo-=
TR"'
IM
;-;,,,_;O
:--l.E:::
TO
;;;P;;;:IC-;;
._-;c
so;;;-,ur=.,:cc
N- - --1 :~::~::"'
f-DES
::_M
_O
::_P_RESS
_ IN_AC:::ET---A___
" --'"
cc'c"
c=-'
- ---j Act!IVl5 (43"1
f-D_<L_o,_EN___><---=-PO___
TASS=IU---M-:;TAB=LE="=-----1 Myl!V1{37"); S!lndoz{l3.5%)
0
f-~,_,
-ISO-c-: ~--ll---~--.~
---'"°
=TE=:::::::::,~
:EC
:-_A_PS_uLE_s_ _---1:~~:5(: :~;Wockhardt (22-5
; Taro
f-EP___IT:-:
O___
LTCC
A1'
:::E==c:--TS
- - - --j'ir11ro(52"); arerw: (3.4%); A?Ct-eic(3")
f-::---•:::---~1::::'~:-:•:---:::c::cc:.,-;"-'--------1~:r•: 3:::~tavis[26.8"l
7 MvllVl (82")
1--:::::v:::,::c::::~::::"EA::'°---,:;;;~;;cu:-,,::-'_su_LE_s_ _ _
1--,o:::,:::,RA:::M::,o:::,-::HC::-lc:;CA:;cPS---U."ES,--------1 :!l:.: c~~")
f-PEN_IC_
ILL___
IN___
v,___T___
AB=l.E---TS=--------j ~ndoz {26"); Northstar {5.3"); D!llla (4"); Aurobi ndo(3.6"); Greenstone(2%)
PRAZOSINHCLCAPSULES
Myl!Vl {71");Mytan lnsL (0.5")
7 ,:::NE:::Tc:A8---LETS=------j MvllVl (35"); Cad ista [30.3%); &andoz 111%); Mylan Inst [0.3~
"",ro------,HL-0:-:RP---,""RAZ
TOP IRAM ATE SPR l~LECAPSULES
Zydus (81%); Actavi5 {3.S"I
icW-,-AR::-:FccAR:::,N::cSO::-:~:::-U:-cM:-;TA:::._;-;,rs=10c:M:;cG-;;10c;-0--7 Taro (5 7"} ·Zydus (161%); Upsher·Smith [5%); Am nm l (0.4 %);
C.,1 ,d ..
I' 1•, I .··•",1•<. l,1, \•.,• . ;,r, "'- ,··
8/":1,, 1i/2 l I.' 1,111 .I ,1 ,,t d/J~
848.
Actav1s
Patel speaks to Rogerson on 8/27 (3 calls);
Rekenthaler speaks to Falkm on 8/18 (2
calls), 8/24; 8/26 (4 calls) and 8/28
The day before the increase became effective – August 27, 2014 – Defendant
Patel spent most of her morning discussing the price increases with her contacts at Sandoz,
Actavis, Taro, Zydus and Glenmark:
a
a Target Name
Date Call Type8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
8/27/2014 I Voice
8/27/2014
Voice
849.
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
Patel, Nisha (Teva)
a- Direction a- Contact Name
Outgoing
IOutgoing
Outgoing
IOutgoing
Outgoing
IOutgoing
Incoming
IIncoming
Outgoing
IIncoming
Outgoing
IIncoming
Outgoing
CW-1 (Sandoz)
Rogerson, Rick (Actavis)
Rogerson, Rick (Actavis)
Aprahamian, Ara (Taro)
CW-1 (Sandoz)
Green, Kevin (Zydus)
Rogerson, Rick (Actavis)
Rogerson, Rick (Actavis)
Rogerson, Rick (Actavis)
Green, Kevin (Zydus)
Brown, Jim (Glenmark)
Brown, Jim (Glenmark)
Green, Kevin (Zydus)
a- Time - Duration 7:11:03
8:02:19
8:02:42
8:27:27
8:31:03
8:32:42
8:41:01
8:41:06
8:58:01
9:23:26
10:34:34
16:29:08
17:09:15
0:11:13
0:00:00
0:00:03
0:02:25
0:00:33
0:20:31
0:00:00
0:00:25
0:16:23
0:18:34
0:00:06
0:07:52
0:00:06
In addition to those phone communications noted above, representatives from
Teva and every other defendant met in Boston, Massachusetts shortly before the increase, from
August 23-26, 2014, for the NACDS annual event, which was the largest pharmaceutical
A66
industry meeting of the year. Defendants Cavanaugh, Rekenthaler and Patel, along with many
other Teva executives, as well as executives from every other corporate Defendant, attended.
850.
For those few drugs where the phone records do not identify direct
communications between Teva executives and their competitors, these executives, at a minimum,
communicated through other competitors.
851.
For example, with regard to Enalapril, Defendant Patel was speaking to
Defendant Aprahamian at Taro as shown above. Defendant Aprahamian, in turn, spoke to M.C.,
the Vice President of Sales and Marketing at Wockhardt, on August 8, 2014 for thirteen (13)
minutes, and again twice on August 14, 2014, including one call lasting eight (8) minutes.
852.
Similarly, with regard to the drug Prochlorperazine, Defendant Rekenthaler
communicated with Defendant Nesta at Mylan on August 7 and August 11, as shown above.
Defendant Nesta, in turn, communicated with M.D., a senior sales executive at non-Defendant
Cadista Pharmaceuticals, on the same days that he had been communicating with Defendant
Rekenthaler.
853.
A large number of the drugs on Teva's August 28, 2014 price increase list were
selected because Teva was following a "high quality" competitor. The coordination between
Teva and certain co-conspirators regarding those drugs is discussed more fully below.
*********
x.
James Nesta
1074. Defendant Nesta started his employment with Mylan in 2000 and is currently the
Vice President of Sales at Defendant Mylan. Nesta communicates regularly with his
counterparts at many of the corporate Defendants. For example, between January 2011 and
February 2016, Defendant Nesta exchanged at least 4,429 phone calls and text messages with his
A67
contacts at Defendants Greenstone, Amneal, Teva, Dr. Reddy's, Zydus, Aurobindo, Actavis,
Lupin, Sandoz, Lannett, Taro, and Par. These communications are detailed in the table below:
Contact Name
Hatosy, Robin (Greenstone)
Green, Kevin (Teva)
B.R. (Dr. Reddy's)
S.R.(1) (Amneal)
K.R. (Zydus)
Green, Kevin (Zydus)
Rekenthaler, David (Teva)
A.T. (Aurobindo)
Falkin, Marc (Actavis)
J.K. (Aurobindo)
V.B. (Dr. Reddy's)
Berthold, David (Lupin)
CW-4 (Sandoz)
J.A. (Dr. Reddy's)
K.N. (Dr. Reddy's)
Nailor, Jill (Greenstone)
K.S. (Lannett)
T.W. (Dr. Reddy's)
P.M. (Aurobindo)
T.G. (Aurobindo)
S.R.(2) (Amneal)
R.C. (Teva and Aurobindo)
Patel, Nisha (Teva)
Sullivan, Tracy (Lannett)
L.P. (Taro)
B.P. (Zydus)
C.N. (Sandoz)
Teva Pharmaceuticals
J.H. (Par)
Count
Min Date
Max Date
2310
6/9/2011
8/24/2015
461
2/21/2012
10/4/2013
386
1/6/2011
6/28/2012
215
12/7/2012
12/17/2015
121
7/21/2011
10/1/2014
117
1/7/2014
8/17/2017
102
4/5/2012
3/17/2015
95
8/26/2012
5/1/2013
78
12/3/2013
8/17/2015
76
10/1/2013
1/8/2016
71
8/7/2014
2/2/2016
68
4/21/2013
10/13/2014
67
9/6/2012
10/14/2013
52
3/9/2011
2/27/2014
42
6/7/2011
6/9/2011
40
12/5/2012
11/13/2015
35
1/4/2013
4/23/2014
14
1/11/2013
2/5/2013
13
4/5/2013
6/19/2013
12
2/25/2016
2/25/2016
11
10/1/2014
1/15/2015
10
7/20/2011
11/2/2011
10
5/10/2013
8/8/2013
7
7/21/2014
7/22/2014
4
11/2/2012
1/17/2013
4
7/21/2011
7/21/2011
3
12/2/2012
12/17/2012
3
8/2/2011
8/2/2011
2
2/4/2014
2/4/2014
*****************
D.
Consciousness of Guilt
1123. The Defendants were aware that their conduct was illegal. They all made
consistent efforts to avoid communicating with each other in writing, or to delete written
electronic communications after they were made. There are numerous examples, discussed
throughout this Amended Complaint, where Teva employees indicated that they could not talk
by e-mail, but had additional information that they could only convey personally. This was part
of a consistent effort by these individuals, as well as individuals at other corporate Defendants, to
avoid putting incriminating information in writing, in order to evade detection.
1124. For example, when Defendant Kevin Green wanted to speak with a particular
competitor, he would routinely send a text message to that competitor, saying only "call me."
A68
Again, this was done to avoid putting any potentially incriminating communications in writing.
Defendant Patel learned this technique from Defendant Green, shortly after starting at Teva, and
adopted a similar strategy for communicating with competitors.
1125. Defendant Armando Kellum of Sandoz was also aware that what he and others at
Sandoz were doing was illegal. Kellum had received antitrust training, and knew that conspiring
with competitors to fix or raise prices, or to allocate customers or markets, was a violation of the
antitrust laws. Kellum would routinely admonish Sandoz employees for putting anything
incriminating into e-mails, and voiced concern that the conduct they were engaging in – if
discovered – could result in significant liability. As a result of Kellum's admonishments, Sandoz
employees (including Kellum himself) routinely lied in e-mails about the sources of their
information to camouflage their conduct, claiming they learned the information from a customer
instead of a competitor.
1126. Similarly, Defendant Jill Nailor of Greenstone instructed her subordinates to
avoid putting any sensitive market intelligence in writing.
1127. Many of the individual Defendants, and others employees of the various corporate
Defendants, took active steps to delete their conspiratorial communications with competitors,
and destroy evidence of their illegal behavior.
1128. For example, Defendant Nisha Patel produced text messages – in response to the
States' subpoena – going back as far as early 2014. Prior to producing those text messages,
however, Patel had deleted all of her text communications with competitors from the same time
period, including many text messages with individual Defendants Aprahamian, Brown,
Cavanaugh, Grauso, Green, Nailor, Rekenthaler and Sullivan; and many other text messages
with employees of corporate Defendants Dr. Reddy's, Glenmark (including CW-5), Greenstone
(including Defendant Hatosy), Par, Sandoz, Upsher-Smith and Zydus.
A69
1129. Patel deleted these text messages after a conversation with Defendant Rekenthaler
in early 2015, when Rekenthaler warned Patel to be careful about communicating with
competitors. Rekenthaler was aware of the government investigations that had been
commenced, and told Patel that the government was showing up on people's doorsteps.
Sometime after that, Patel deleted her text messages with competitors.
1130. Defendant Apotex also destroyed an entire custodial file for one of its key
employees (B.H., a senior sales executive), after the States requested it through an investigatory
subpoena in July 2017. As discussed above, B.H. was involved in coordinating two significant
price increases with Defendant Patel of Teva in 2013, which resulted in Apotex soaring in the
quality competitor rankings. After the States' subpoena was issued, Defendant Apotex destroyed
B.H.'s custodial file – and did not inform the States that it had done so for over a year.
1131. Many of the Defendants have been coordinating consistently to obstruct the
ongoing government investigations and to limit any potential response. This coordination goes
back at least as far as October 2014, when Congress first started investigating price increases in
the generic drug industry.
1132. For example, in early October 2014, Heritage received a letter from
Representative Cummings and Senator Sanders as part of their inquiry into generic drug pricing.
Heritage's outside counsel immediately set out to coordinate a response with counsel for
Defendants Teva and Mylan, to provide what he referred to as "polite f-u" letters to Congress:
A70
From:
To:
CC:
BCC:
Subject:
Sent:
Attachment s:
Jeff Glazer
RE: letter to Mr. Glazer. President and Chiel Executive Officer Heritage Pharmaceuticals Inc.
10/312014 03:22:12 PM -0400 (EDT)
Spoke with my colleague
in DC, who is doing the response letter for Mylan. Her husband works for
and he
is doing the response for Teva.
They have both been in contact with GPhA on coordinating a response - and the consensus at this point is that the responses will be "polite
f-u· letters.
lo schedule a conference call to coordinate the response and make sure everyone is on the same
She told me that Teva authorized page.
She said the response can either be a ghost written teller on HPI lettemead or a letter from outside counsel. Just depends on your
preference,
I'll keep you updated.
1133. The coordination did not stop there. When the federal government executed a
search warrant against Defendant Patel at her home on June 21, 2017, she immediately called
Defendant Rekenthaler (from another phone because her phone had been seized) even though
Rekenthaler was no longer employed at Teva and was by that point the Vice President of Sales at
Defendant Apotex. Rekenthaler then immediately called Defendant Cavanaugh and C.B.,
another senior Teva executive. Rekenthaler spoke several times to Defendant Cavanaugh before
then calling his own attorney and speaking twice. Later that day, Patel called Rekenthaler two
more times to coordinate her response to the government.
1134. Other Defendants took similar action in response to events in the States'
investigation. Several were speaking frequently at or around the time a subpoena was issued, or
when the States were engaging in substantive discussions with their counsel. As just one
example, on July 17, 2018 the States sent a subpoena to Defendant Grauso, through his counsel.
That same day, Grauso spoke to Defendant Aprahamian for more than twelve (12) minutes. The
States then set up a conference call with Defendant Grauso's counsel for July 25, 2018. The day
before that call – July 24, 2018 – Defendant Aprahamian spoke to his lawyer, and then shortly
thereafter called Defendant Grauso. The next day, shortly after a conversation between the
States and counsel for Defendant Grauso, Defendants Aprahamian and Grauso spoke again, this
time for nearly seven (7) minutes.
A71
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
IN RE: GENERIC PHARMACEUTICALS
PRICING ANTITRUST LITIGATION
____________________________________
THIS DOCUMENT RELATES TO:
State Attorneys General Litigation
____________________________________
THE STATE OF CONNECTICUT;
THE STATE OF ALABAMA;
THE STATE OF ALASKA;
THE STATE OF ARIZONA;
THE STATE OF ARKANSAS;
THE STATE OF CALIFORNIA;
THE STATE OF COLORADO;
THE DISTRICT OF COLUMBIA;
THE STATE OF DELAWARE;
THE STATE OF FLORIDA;
THE STATE OF HAWAII;
THE STATE OF IDAHO;
THE STATE OF ILLINOIS;
THE STATE OF INDIANA;
THE STATE OF IOWA;
THE STATE OF KANSAS;
THE COMMONWEALTH OF KENTUCKY;
THE STATE OF LOUISIANA;
THE STATE OF MAINE;
THE STATE OF MARYLAND;
THE COMMONWEALTH OF
MASSACHUSETTS;
THE STATE OF MICHIGAN;
THE STATE OF MINNESOTA;
THE STATE OF MISSISSIPPI;
THE STATE OF MISSOURI;
THE STATE OF MONTANA;
THE STATE OF NEBRASKA;
THE STATE OF NEVADA;
THE STATE OF NEW HAMPSHIRE;
THE STATE OF NEW JERSEY;
THE STATE OF NEW MEXICO;
THE STATE OF NEW YORK;
THE STATE OF NORTH CAROLINA;
MDL 2724
16-MD-2724
HON. CYNTHIA M. RUFE
Civil Action No.
17-3768
June 15, 2018
PLAINTIFF STATES'
CONSOLIDATED AMENDED
COMPLAINT
Non-Public Version:
Filed Under Seal
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THE STATE OF NORTH DAKOTA;
THE STATE OF OHIO;
THE STATE OF OKLAHOMA;
THE STATE OF OREGON;
THE COMMONWEALTH OF
PENNSYLVANIA;
THE COMMONWEALTH OF PUERTO RICO;
THE STATE OF RHODE ISLAND;
THE STATE OF SOUTH CAROLINA;
THE STATE OF TENNESSEE;
THE STATE OF UTAH;
THE STATE OF VERMONT;
THE COMMONWEALTH OF VIRGINIA;
THE STATE OF WASHINGTON;
THE STATE OF WEST VIRGINIA;
THE STATE OF WISCONSIN;
THE STATE OF WYOMING;
v.
ACTAVIS HOLDCO U.S., INC.;
ACTAVIS PHARMA, INC.;
ASCEND LABORATORIES, LLC;
APOTEX CORP.;
AUROBINDO PHARMA USA, INC.;
CITRON PHARMA, LLC;
DR. REDDY'S LABORATORIES, INC.;
EMCURE PHARMACEUTICALS, LTD.;
GLENMARK PHARMACEUTICALS, INC.;
HERITAGE PHARMACEUTICALS, INC.;
LANNETT COMPANY, INC.;
RAJIV MALIK;
MAYNE PHARMA INC.;
SATISH MEHTA;
MYLAN PHARMACEUTICALS, INC.;
PAR PHARMACEUTICAL COMPANIES, INC.;
SANDOZ, INC.;
SUN PHARMACEUTICAL INDUSTRIES, INC.;
TEVA PHARMACEUTICALS USA, INC.;
ZYDUS PHARMACEUTICALS (USA), INC.
A73
TABLE OF CONTENTS
I.
SUMMARY OF THE CASE .................................................................................................. 1
II. JURISDICTION AND VENUE ......................................................................... 7
III. THE PARTIES ................................................................................................... 8
IV. FACTS SUPPORTING THE LEGAL CLAIMS ............................................. 15
A. The Generic Drug Market ................................................................................................. 15
1. The Hatch-Waxman Act ............................................................................................. 15
2. The Importance of Generic Drugs .............................................................................. 16
3. The Players in the Drug Distribution System ............................................................. 17
a. Manufacturers/Suppliers ......................................................................................... 17
b. Wholesalers/Distributors ........................................................................................ 20
c. Group Purchasing Organizations (GPOs).............................................................. 21
d. Pharmacy and Supermarket Chains ....................................................................... 21
e. Customer Incentives ................................................................................................ 22
4. The Cozy Nature of the Industry and Opportunities for Collusion ............................ 24
a. Trade Association and Customer Conferences ....................................................... 25
b. Industry Dinners and Private Meetings .................................................................. 25
5. The Overarching Conspiracy Between Generic Manufacturers – .............................. 27
Playing Nice In The Sandbox
6. Generic Drug Price Spikes Since 2013 ....................................................................... 33
B. The Illegal Schemes ......................................................................................... 34
1. Market Allocation Agreements to Maintain Market Share and Avoid
Price Erosion ............................................................................................................... 34
a. Nimodipine .............................................................................................................. 34
i. The Heritage/Sun Agreement. ........................................................................... 34
ii. The Heritage/Ascend Agreement. ..................................................................... 39
b. Zoledronic Acid ...................................................................................................... 42
c. Meprobamate........................................................................................................... 46
d. Doxy DR ………………………………………………………………………… 49
i. The Heritage/Mylan Agreement........................................................................ 49
I. The Large Wholesaler Account ("Wholesaler A") ...................................... 51
II. The Large Retail Pharmacy Account ("The Pharmacy") ............................ 52
III. Other Customer Accounts .......................................................................... 54
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ii. The Heritage/Mayne Agreement ...................................................................... 56
2. Agreements to Fix Prices ............................................................................................ 61
a. Doxycycline Monohydrate (2013) ........................................................................ 62
b. Heritage 2014 Price Increases ............................................................................... 67
i.
Acetazolamide.............................................................................................. 74
ii. Fosi-HCTZ ................................................................................................... 76
iii. Glipizide-Metformin .................................................................................... 80
iv. Glyburide ..................................................................................................... 81
v.
Glyburide-Metformin ................................................................................... 87
vi. Leflunomide ................................................................................................. 90
vii. Nystatin ........................................................................................................ 92
viii. Paromomycin ............................................................................................... 97
ix. Theophylline ER .......................................................................................... 98
x.
Verapamil ................................................................................................... 101
C. Consciousness of Guilt ................................................................................... 104
V. TRADE AND COMMERCE ......................................................................... 105
VI. MARKET EFFECTS ..................................................................................... 106
COUNT ONE
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND SUN, AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR THE GENERIC DRUG NIMODIPINE IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 107
COUNT TWO
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND ASCEND, AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS AND FIX PRICES FOR THE GENERIC DRUG NIMODIPINE IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 108
COUNT THREE
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND DR. REDDY'S, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS FOR THE GENERIC DRUG ZOLEDRONIC ACID IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 110
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COUNT FOUR
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND DR. REDDY'S, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
ALLOCATE MARKETS AND FIX PRICES FOR THE GENERIC DRUG
MEPROBAMATE IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT .................. 111
COUNT FIVE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANTS HERITAGE, EMCURE
AND MYLAN, AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT
AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS FOR THE GENERIC DRUG DOXY DR IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 112
COUNT SIX
(BY CERTAIN PLAINTIFF STATES AGAINST DEFENDANTS RAJIV MALIK
AND SATISH MEHTA) – HORIZONTAL CONSPIRACY TO ALLOCATE
MARKETS FOR THE GENERIC DRUG DOXY DR IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 113
COUNT SEVEN
(BY ALL PLAINTIFF STATES AGAINST DEFENDANTS HERITAGE AND
MAYNE, AND ALL OTHER CORPORATE DEFENDANTS UNDER JOINT AND
SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO ALLOCATE MARKETS
FOR THE GENERIC DRUG DOXY DR IN VIOLATION OF SECTION 1 OF THE
SHERMAN ACT ........................................................................................................................ 114
COUNT EIGHT
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, LANNETT, PAR AND MYLAN, AND ALL OTHER CORPORATE
DEFENDANTS UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL
CONSPIRACY TO RAISE PRICES FOR THE GENERIC DRUG DOXY MONO IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 116
COUNT NINE
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, TEVA AND ZYDUS, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
RAISE PRICES FOR THE GENERIC DRUG ACETAZOLAMIDE IN VIOLATION
OF SECTION 1 OF THE SHERMAN ACT .............................................................................. 117
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COUNT TEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, AUROBINDO, CITRON, GLENMARK AND SANDOZ, AND ALL
OTHER CORPORATE DEFENDANTS UNDER JOINT AND SEVERAL LIABILITY) –
HORIZONTAL CONSPIRACY TO RAISE PRICES FOR THE GENERIC DRUG
FOSI-HCTZ IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ............................ 118
COUNT ELEVEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, MYLAN AND TEVA, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
RAISE PRICES FOR THE GENERIC DRUG GLIPIZIDE-METFORMIN IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 120
COUNT TWELVE
(BY ALL PLAINTIFF STATES AGAINST DEFENDANTS HERITAGE, TEVA,
AUROBINDO AND CITRON, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
RAISE PRICES FOR THE GENERIC DRUG GLYBURIDE IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 121
COUNT THIRTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, TEVA, AUROBINDO AND ACTAVIS, AND ALL OTHER CORPORATE
DEFENDANTS UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL
CONSPIRACY TO RAISE PRICES FOR THE GENERIC DRUG GLYBURIDEMETFORMIN IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT ........................ 122
COUNT FOURTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, TEVA AND APOTEX, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
RAISE PRICES FOR THE GENERIC DRUG LEFLUNOMIDE IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 124
COUNT FIFTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, TEVA, AND SUN, AND ALL OTHER CORPORATE DEFENDANTS
UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO
RAISE PRICES FOR THE GENERIC DRUG NYSTATIN IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 125
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COUNT SIXTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND SUN, AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO RAISE
PRICES FOR THE GENERIC DRUG PAROMOMYCIN IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 126
COUNT SEVENTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE AND TEVA, AND ALL OTHER CORPORATE DEFENDANTS UNDER
JOINT AND SEVERAL LIABILITY) – HORIZONTAL CONSPIRACY TO RAISE
PRICES FOR THE GENERIC DRUG THEOPHYLLINE IN VIOLATION OF
SECTION 1 OF THE SHERMAN ACT .................................................................................... 128
COUNT EIGHTEEN
(BY ALL PLAINTIFF STATES EXCEPT CALIFORNIA AGAINST DEFENDANTS
HERITAGE, MYLAN AND ACTAVIS, AND ALL OTHER CORPORATE
DEFENDANTS UNDER JOINT AND SEVERAL LIABILITY) – HORIZONTAL
CONSPIRACY TO RAISE PRICES FOR THE GENERIC DRUG VERAPAMIL IN
VIOLATION OF SECTION 1 OF THE SHERMAN ACT ....................................................... 129
COUNT NINETEEN– SUPPLEMENTAL STATE LAW CLAIMS ........................................ 130
Connecticut .......................................................................................................................... 130
Alabama............................................................................................................................... 131
Alaska .................................................................................................................................. 132
Arizona ................................................................................................................................ 132
Arkansas .............................................................................................................................. 133
California ............................................................................................................................. 134
Colorado .............................................................................................................................. 135
District of Columbia ............................................................................................................ 136
Delaware .............................................................................................................................. 136
Florida ................................................................................................................................. 137
Hawaii ................................................................................................................................. 139
Idaho .................................................................................................................................... 140
Illinois .................................................................................................................................. 140
Indiana ................................................................................................................................. 141
Iowa ..................................................................................................................................... 142
Kansas ................................................................................................................................. 143
Kentucky ............................................................................................................................. 143
Louisiana ............................................................................................................................. 147
Maine ................................................................................................................................... 147
Maryland ............................................................................................................................. 147
Massachusetts .........................................................................................
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