This class action lawsuit alleges that Heritage Pharmaceuticals conspired to raise prices of glyburide and made illegal agreements with co-conspirator manufactures to allocate customers in the glyburide market.
Glyburide is an oral anti-diabetic medication prescribed to treat high blood sugar caused by Type 2 diabetes. Generic versions of glyburide have been on the market since the mid-1990s, and until April 2014, the price of glyburide was relatively stable. Generic drug manufacturers have taken advantage of their market position to hike prices far above competitive levels. Heritage has done so with glyburide. Between April 1, 2014 and December 21, 2015, the price of glyburide increased to 200% of its prior prices.
Top executives at defendant Heritage have already admitted parts of the scheme. On January 9, 2017, CEO and Chairman Jeffrey Glazer and Senior Vice President Jason Malek pleaded guilty to federal charges. Each admitted that Heritage conspired to raise prices and made illegal agreements with co-conspirator manufacturers to allocate customers in the glyburide market and in other drug markets.
Illegal price hikes ricochet throughout the U.S. economy, and independent pharmacies suffer part of the damage. There are approximately 22,000 independent pharmacies in the U.S, as contrasted with chain drug stores such as CVS, supermarket drug stores, and mass merchandiser drug stores such as Wal-Mart. Independent pharmacies obtain drugs by purchasing from a drug wholesaler such as McKesson Corp., Cardinal Health Inc., or Amerisource Bergen Corp. Independent pharmacies have no meaningful ability to negotiate these acquisition costs. When a drug is dispensed to a patient/customer, the pharmacy is often reimbursed by the patient’s health plan. But the insurer or health plan does not simply pay the pharmacy the actual cost of acquisition. Instead, insurers and health plans publish reimbursement rates for each drug, based on average costs of acquisition for a certain time period. These schedules often lag behind the spikes in drug costs caused by Defendants’ price-fixing activity, so pharmacies are reimbursed at lower rates even while their acquisition costs have increased. By selling essential medications, independent pharmacies often suffer a loss.
Based on the facts of the case, the plaintiffs allege the following violations: