Mylan executive targeted in generic drug price-fixing probe

A top executive at Mylan is the target of a multi-state investigation into price fixing by generic drug manufacturers, state attorneys general said Tuesday.

The state officials are seeking to sue Rajiv Malik, president and executive director of Mylan N.V., as part of a larger investigation by 45 states, plus the District of Columbia and Puerto Rico, according to a statement by Connecticut Attorney General George Jepsen.

This is the first time a senior executive has been targeted in the case, which was initially filed in December.

The amended complaint also seeks to expand the number of defendants from six generic drug manufacturers to 18, and the number of drugs from two to 15.

The states allege the companies and executives colluded to keep prices high and reduce competition.

“These conspiracies were part of a much broader, overarching industry code of conduct that enabled the defendant manufacturers to divvy up the market for specific generic drugs in accordance with an established, agreed-upon understanding for assigning each competitor their share of the market,” Jepsen said.

In a statement, Mylan denied the accusations.

“We have been investigating these allegations thoroughly and have found no evidence of price fixing on the part of Mylan or its employees,” the company said. “Our review of the Connecticut Attorney General’s press release underpinning the complaint does not change our views. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully.”

Generic drug manufacturers generally don’t face the same research and develop costs involved in bringing a branded drug to market, so generic drugs should be less expensive and less prone to dramatic price spikes.

According to Jepsen, “the defendant companies’ collusion was so pervasive that it essentially eliminated competition from the market for these 15 drugs in its entirety.”

The result was artificially high costs, he said.

The expanded lawsuit comes at a time of increased scrutiny from Congress over drug pricing.

Executives from Mylan, the manufacturer of the EpiPen, testified last year in front of a congressional committee to explain steep price increases.