New Jersey drug maker to pay $7 million to settle claims of inflating drug prices

New Jersey-based Heritage Pharmaceuticals, Inc., has agreed to pay over $7 million to settle allegations that it schemed to fix prices for several of its drugs.

Federal prosecutors say the generics drug maker conspired with competitors between 2012 and 2015 to artificially inflate the price of pharmaceuticals, rig bids, and allocate customers. The drugs, including those to treat high blood pressure, asthma, and diabetes — were supplied to Medicare, Medicaid, and the Department of Defense.

“Consumers have the right to generic drugs sold at prices set by competition, not collusion,” said Makan Delrahim of the Department of Justice’s Antitrust Division. “Heritage and its co-conspirators cheated and exploited American patients to pad their bottom line. Today’s resolution—requiring an admission of guilt, a criminal penalty, and cooperation in the ongoing investigation—sends a clear message to generic pharmaceutical companies and their executives that this conduct will not be tolerated."

The latest settlement comes at a time when several generics drug makers are under investigation or facing lawsuits over allegations of collusion to raise prices.

Additionally on Thursday, Heritage was charged with a felony criminal count by the federal government for participating in a criminal antitrust conspiracy. Heritage’s former CEO Jeffrey Glazer and former president Jason Malek were previously charged in the DoJ’s ongoing investigation.

Separately, Israeli generics drug maker, Teva Pharmaceutical Industries — whose U.S. headquarters is based in Edison, New Jersey — is the target of a lawsuit filed last week. The anti-trust lawsuit allege that Teva helped mastermind a sweeping conspiracy among generic-drug makers to raise the price of hundreds of medicines.

The lawsuit filed by 43 states including Pennsylvania and New Jersey — led by Connecticut — stems from a five-year investigation, which say that price fixing resulted “in many billions of dollars of harm to the national economy over a period of several years.”

Several former executives at generic drug makers, including Mylan and a unit of Pfizer Inc., were targeted in the lawsuit.