Minnesota Attorney General Keith Ellison has joined a multistate lawsuit alleging a massive price-fixing scheme that could affect an estimated one in five Minnesotans who buy generic prescription drugs.
Minnesota is now one of 43 states and Puerto Rico suing some of the country’s biggest generic drugmakers over what Ellison described Monday as a “well-understood and widely agreed upon” scheme to illegally set drug prices. The states allege that the collusion led to large price increases for 112 drugs, some of which soared more than 1,000% beginning in 2013.
“These increases are not normal,” Ellison said Monday. “They’re not the way the markets are supposed to work. Compared to prior years, these price jumps are staggering.”
The move comes as drug prices have become a major focus of Ellison’s office, which has launched a new task force to investigate the issue. It comes on top of another lawsuit against generics manufacturers filed in December 2016, in which Minnesota is also a plaintiff.
Connecticut is leading the latest lawsuit, which names 20 drugmakers as defendants, including Maple Grove-based Upsher-Smith Laboratories Inc. A spokeswoman for the company declined to comment, citing the pending litigation. The lawsuit also alleges violations of Minnesota antitrust and deceptive trade practice laws.
Minnesota lawmakers also have taken up several measures aimed at controlling drug costs this session. One House proposal would require drugmakers and wholesalers to notify Ellison’s office and justify price hikes of more than 15% a year for certain critical drugs. Another proposal would license and more closely regulate pharmaceutical industry middlemen for greater pricing transparency.
Rep. Rod Hamilton, R-Mountain Lake, who is on Ellison’s drug price task force, expressed outrage Monday over what he called a “greedy drug cartel building a business model that is stealing from the sick, the dying and the disabled.”
“I’ve been sharing my personal story and I’ve been pretty emotional throughout,” said Hamilton, who has shared his experience receiving four- and five-figure bills for medication needed to treat his multiple sclerosis. “Now, forgive me, but I’m just pissed off.”
Stephen Schondelmeyer, head of the department of pharmaceutical care and health systems at the University of Minnesota’s College of Pharmacy, said he has seen patients charged $17,000 for drugs that should instead cost closer to $7. Such price discrepancies, Schondelmeyer said, provide a “bellwether signal that the marketplace is broken.”
“Generics are an essential part of our health care system and pharmaceutical market,” Schondelmeyer said. “We’ve relied on them to help lower the costs and here the very people we counted on and relied upon have turned around and stabbed us in the back with tremendous price increases.”