The Justice Department Is Targeting The Generic Drug Industry For Price Fixing

The United States Department of Justice is reportedly going to file new criminal charges against the drug industry after an investigation suggested there was widespread price-fixing in the generic drugs business, per The Wall Street Journal.

Leading the charge is Assistant Attorney General Makan Delrahim, who is head of the agency’s antitrust division. Though the Department of Justice has long suspected price-fixing in the generic drug industry, the investigation — hampered by a lack of informants — has been slow, and state enforcers have had to act in lieu of federal action.

“If the Justice Department had an easy time of finding informants, then we probably would see this case further along,” said John Lopatka, an antitrust law professor at Penn State Law, in an interview with Bloomberg.

“It has every reason to act expeditiously when it has enough information to proceed. The fact that it’s not acting with much speed is some indication it’s not getting the cooperation it would like,” he added.

That said, there has been much activity in recent months in addition to the reported upcoming charges. Two lower-profile companies and two executives have been charged with price-fixing — with the most recent indictments delivered in December. The December target was Rising Pharmaceuticals, which had fixed prices on a hypertension drug.

According to drug company executives, the alleged price-fixing has come as companies relocate their factories to countries with cheaper labor costs, like China and India. Though consumers might expect lower prices as a consequence — particularly since quality control can at times take a hit — executives have allegedly conspired to “compete with one another, but not too hard” to maximize earnings (via Bloomberg).

One of the biggest targets of the probe has been Mylan, which supplies medication to Walgreens. It reportedly refused to comply with a state subpoena and replied to a federal subpoena in a way that prosecutors considered unsatisfactory.

That said, the company released a statement stating its innocence.

“Mylan with assistance from outside counsel has thoroughly investigated allegations made against our company and employees. We have not found any evidence to corroborate the allegations,” the company said.

In addition to bringing charges against the generic drug industry, Delrahim also said that the department was preparing several other cases as well. Among these include the merger of T Mobile and Sprint, the purchase of travel website Farelogix Inc by Sabre Corp, music licensing deals, and big tech.

Meanwhile, while many generic drug manufacturers are using price-fixing to maximize profits, big pharma involved in researching antibiotics are losing so much money that many are going bankrupt. As a result, scientists are warning of a major drug-resistant bacteria crisis, as was previously reported by The Inquisitr.