facebook Collusion among generic drug-makers costing consumers around $1 billion

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U.S. government and 45 states claim collusion among generic drug-makers. The cost to consumers and taxpayers? Perhaps more than $1 billion

collusion pharmaceutical production

We all assume that generic medications are lower-cost alternatives to brand name medications. But what if they aren’t? Or what if the cost of a generic is artificially high because of collusion?

Both are questions that 45 states and the U.S. Department of Justice are asking the court to take on.

National Public Radio reports that the states and federal government have filed a complaint in court accusing drug-makers of collusion on generic-drug prices. The complaint alleges that when pharmacies asked drug-makers for the lowest price, the manufacturers rigged the bidding process.

“The companies would work out in advance who would get the lowest price, and then the other competitors may put in what we call a ‘cover bid,’” Michael Cole, head of Connecticut’s antitrust department, told NPR.

Cole’s team has gathered evidence they say shows pharmaceutical company executives divvied up customers, set prices and then created the illusion that generic medications were sold in an open and fair marketplace.

As a result of the “fixed” higher prices, consumers, businesses and tax-funded programs paid more than $1 billion more than they could have when filling their prescriptions and in higher insurance premiums.

Pharmaceutical company executives divvied up customers, set prices and then created the illusion that generic medications were sold in an open and fair marketplace.

Will going to court get results? The legal action, filed in October 2017, now includes 18 companies, according to The Street.

So far, two executives from Heritage Pharmaceuticals have pleaded guilty to antitrust crimes. They’re providing information to prosecutors, who say the two executives rigged prices on a variety of drugs, including the widely used antibiotic doxycycline, which saw an 8,000 percent price spike.

Has the price of a generic drug caused you sticker shock at the pharmacy counter? Share your story with Voices for Affordable Health.