Former pharm execs agree to fines, cooperation in generic drug investigation

FRANKFORT, Ky. (WTVQ) – Two former executives of a generic drug manufacturer have agreed to each pay civil penalties and to cooperate with the ongoing litigation and investigation into anti-competitive activity in the generic drug industry, according to Attorney General Andy Beshear.

Beshear announced in December that Kentucky had joined the multistate lawsuit alleging widespread collusion among a large group of pharmaceutical companies to reduce competition and increase the price of generic drugs.

Two executives of New Jersey-based Heritage Pharmaceuticals Inc., one of the companies named in the December lawsuit, each entered into plea agreements with the U.S. Department of Justice after being charged with two counts of criminal violations of the Sherman Antitrust Act.

In addition to their cooperation with the states’ ongoing investigation, they will each pay a $25,000 civil penalty to the states.

“At a time when access to affordable health care and low-cost medicine for our seniors and families could not be more critical, we must hold any pharmaceutical company accountable that allegedly conspired to rip Kentuckians off, charging far higher prices than our families should have to pay,” Beshear said. “My office will continue to pursue this case to carry out our mission to protect Kentucky families and seniors from those who seek to defraud them.”

The two executives are Jason Malek, former president of Heritage Pharmaceuticals Inc., and Jeffrey Glazer, the company’s former chair and CEO. (Their settlement agreements with the states may be viewed by clicking on their names.)

In 2015, generic drug sales in the United States were estimated at $74.5 billion; currently, the generic pharmaceutical industry accounts for approximately 88 percent of all prescriptions written in the United States.

In July 2014, Connecticut initiated an investigation of the reasons behind suspicious price increases of certain generic pharmaceuticals.

That investigation resulted in the December lawsuit filed against six generic drug-makers for allegedly fixing prices and allocating markets for doxycycline hyclate delayed release, an antibiotic; and glyburide, an oral diabetes medication.

Beshear said the investigation by states is ongoing as to a number of additional generic drugs, generic drug companies and company executives.