Via America’s Lawyer: Mike Papantonio and Trial Magazine’s Editor, Farron Cousins, discuss a new suit filed by 44 states alleging that 20 major drug manufacturers conspired to artificially inflate and manipulate the prices of more than 100 generic drugs well over 1,000%.


*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Mike Papantonio:             Few months ago we reported on an investigation into whether or not generic drug makers were colluding to raise prices and to keep competitors out of certain markets. That investigation has now grown into full blown lawsuits coming from 44 states. I have Farron Cousins from the Trial Lawyer Magazine with me now to explain what is happening.

Well, it’s pretty apparent what’s happening is price gouging and we’ve been talking about this story. Finally, finally, you know, I still don’t know that, that television media is covering this story because TV media is making so much money on advertisements. I mean it’s, what is it about every eight minutes, there’s a pharmaceutical advertisement?

Farron Cousins:                  Yeah, I mean they’re, they’re all over the place in corporate media and you know, the, the corporate news media is no exception to that. That’s where they get a lot of their money. But with this story, you know, again, this is what we talked about a few years ago. This is the one that had the sandbox where you have these drug companies, the generic makers, they go into a specific market and they say, I’m going to take one pharmacy.

You take another, you other company, you take another, we can all raise our prices accordingly. But nobody competes at the same pharmacy in a given area. That that’s the overall kind of scheme that the investigators have called a cartel basically. So now what we found is that basically the story everybody’s been waiting for you have collusion and obstruction of justice is what they’re describing it as.

Because the obstruction of justice comes from the fact that you have Teva Pharmaceuticals deleting evidence, deleting text messages, deleting emails that showed that their executives were working with the other pharmacies to do this and instructing them on what to say to investigators.

Mike Papantonio:             Yeah, let me put in perspective. Last week or a couple of weeks ago, we did a show where the pharmaceutical company had marked up a drug 100000%. You remember? 100 not making that up. It was a drug for babies that were, the children were having seizures and the company marked it up 100000%. Now this story talks about the run of the mill markup is, is it 100%, 200%, 20000%. The numbers of these markups are staggering.

Okay. 100000% is not unusual and that’s a staggering number. And what ends up happening is these companies that, that people that are named and people like Pfizer, Teva, Novartis, Mylan. And what I love about this story is that also you have dozens of senior executives that are, have been named. As matter of fact, one of the executives, they, I mean is in the story, that fella named Nisha Patel.

Farron Cousins:                  Yeah.

Mike Papantonio:             So Nisha Patel goes about, no this is girl, a woman, isn’t it?

Farron Cousins:                  I believe so.

Mike Papantonio:             Yeah. So Nisha Patel goes about destroying emails because they know that there’s an investigation taking place. So they go about destroying emails. That’s where the obstruction comes in.

Farron Cousins:                  Right.

Mike Papantonio:             The collusion is maybe sometimes a little more difficult to prove. Prosecutors are going to be able to prove it here, I promise you. But when you get to, to collusion, you’ve, you’ve moved from just a pure civil action, if it involves any type of criminal collusion. I’m wondering if this is where this goes. Where do you think, what do you think?

Farron Cousins:                  I think absolutely. I think in this particular instance, this is not going to be something that is difficult to prove because they may not have Nisha Patel’s communications anymore, but keep in mind she was destroying evidence in 2016. This investigation began in 2014 I believe. 44 state attorneys general are on top of this.

Mike Papantonio:             And she, and she’s still destroying material.

Farron Cousins:                  Right, but there’s no way she could have destroyed everything, so there’s a good chance parts of it are still out there. Obstruction hundred percent that’s going to be easy.

Mike Papantonio:             Prosecution, what’s your call? I mean, yeah, of course it’s impossible to get to, to get the government to prosecute anybody who’s dressed up in a three piece suit or has a Rolex watch or maybe is in Washington, I mean in Washington or Wall Street, forget trying to get prosecution. What’s your call on this one though?

Farron Cousins:                  I believe that Patel is going to end up singing like a bird to, to the investigators and saying, listen, please don’t prosecute me. You want to know the truth. Here’s what happened. At the end of the day, everybody’s probably going to get fined a ridiculous amount that’s still less than they made gouging consumers with these markups.

Mike Papantonio:             In other words, here, here it is. They bring charges and the company pays their way out of the charges. They say, well, we’ll pay you $2 billion. In the end, people don’t realize taxpayers end up paying that $2 billion because it’s a write off for the company. And so, you know, that’s what they’ve been doing for decades now. So if as we look at this case, these are drugs that affect, I mean these are serious drugs. They were saving people’s lives with HIV.

They’re saying the markup was ridiculous. People couldn’t even afford to get HIV drugs, antidepressants, cancer, drugs. These weren’t simply, this was an aspirin or you know, minor kind of medication. This was life saving kind of material. And these people are so callous that they still marked it up. They colluded. They had, as you point out, their sandbox where they would meet in exotic places. Right? Tell us about that.

Farron Cousins:                  Yeah, they, they would go have these wonderful dinners, these meetings, I forget the exact name of it that we had talked about in the past, but they actually had a name for the meetings, their little club meetings, and that’s when they would sit there and break up the pharmacies in any given city, county, whatever it was, and said, all right, we’re all gonna play in the sandbox. But in order to play nicely, we have to divide the sandbox.

Nobody steps onto the other one’s turf. We all get an equal share. And this is part of the collusion part, we all raise our prices accordingly. So that way our generic is not more expensive than your generic. We’re all on the same page. And that’s what allowed them to do things like right here. Albuterol sulfate, used to treat asthma and other lung conditions. They raised the price on that. The generic 4,014%.

Mike Papantonio:             Yeah. All right, we’ll follow this story.

Mike Papantonio is an American attorney and television and radio talk show host. He is past president of The National Trial Lawyers, the most prestigious trial lawyer association in America; and is one of the few living attorneys inducted into the Trial Lawyer Hall of Fame. He hosts the international television show "America's Lawyer"; and co-hosts Ring of Fire Radio, a nationally syndicated weekly radio program, with Robert F. Kennedy, Jr. and Sam Seder.