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From Antitrust Law Daily, December 14, 2016

Antitrust Division brings first charges in generic drug price fixing probe

By Jeffrey May, J.D.

Two former pharmaceutical industry executives have been charged with participating in a conspiracy to fix prices, rig bids, and allocate customers for two forms of generic drugs. Today, the Department of Justice Antitrust Division announced that Jeffrey Glazer, the former chief executive officer (CEO) of a generic pharmaceutical company, and Jason Malek, the former president of the same company, had been charged earlier this week in the federal district court in Philadelphia. The charges were unsealed today (U.S. v. Glazer, Case No. 2:16-cr-00506-RBS; U.S. v. Malek, Case No. 2:16-cr-00508-RBS).

In separate two-count felony informations, Glazer and Malek were said to have participated in conspiracies involving an antibiotic, doxycycline hyclate, and glyburide, a medicine used to treat diabetes. The challenged conduct took place between April 2013 and December 2015.

"By entering into unlawful agreements to fix prices and allocate customers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines," said Brent Snyder, Deputy Assistant Attorney General for Criminal Enforcement at the Antitrust Division, in announcing the charges in the ongoing investigation. "These charges are an important step in correcting that injustice and in ensuring that generic pharmaceutical companies compete vigorously to provide these essential products at a price set by the market, not by collusion."

The Justice Department did not identify the defendants’ former employer. However, Glazer was the CEO of Heritage Pharmaceuticals, Inc., during the period outlined in the court documents. Malek also has been identified as a former executive at Heritage. The two are said to be brothers-in-law. The Justice Department did not release any information on plea agreements in the case.

Charges in this long-running investigation have been anticipated for quite some time. In 2014, Senator Bernie Sanders, joined by fellow lawmakers, sent a letter to Glazer, seeking information on the dramatic price increases for doxycycline hyclate. The letter represented that the average price of the drug increased by as much as 8,281 percent between October 2013 and April 2014. A number of private antitrust suits have been filed in response to the government’s investigation.

Companies: Heritage Pharmaceuticals, Inc.

MainStory: TopStory AntitrustDivisionNews

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