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CEO DATELINE – Insurer accuses drug companies of price fixing through association events

Aug. 8, 2018
By Walt Williams

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Health insurer Humana is suing nearly 30 drug companies for allegedly fixing the prices of four generic medications, saying the businesses used events held by their trade associations to engage in the scheme.

In a lawsuit filed Aug. 3 in U.S. District Court for Eastern Pennsylvania, the insurer said it is attempting to recover the “egregious overcharges it paid for certain widely-used generic drugs, arising from a far-reaching conspiracy among defendants and others to blatantly fix the price of such drugs.”

Humana alleges the companies orchestrated the scheme through secret communications and meetings, some private and some public. The lawsuit claims at least some of those communications took place at events held by the Association for Accessible Medicines, Healthcare Distribution Alliance and National Pharmacy Forum, which is organized by the Healthcare Supply Chain Association. None of the associations are named as defendants.

The lawsuit is the latest salvo in a long-running public relations war between insurers and drug companies about who is to blame for rising drug prices. However, Humana noted that attorneys general of 47 states, Puerto Rico and the District of Columbia filed a separate lawsuit in 2016 alleging many of the defendants had worked together to fix the prices of 15 drugs, including the four named in its complaint: doxycycline, leflunomide, nystatin and verapamil. The U.S. Department of Justice also is investigating the alleged price fixing.

The state AGs have pointed out “the key role of trade associations and industry conferences in their investigation,” the lawsuit states.

The result of the price fixing, according to Humana, was drastic increases in the cost of many generic medications. For instance, the price of some forms of the antibiotic doxycycline rose 8,000 percent.

None of the associations named in the lawsuit had issued public replies to the allegations as of Wednesday.