Investigation Into Generic Drug Price Fixing Set To Widen

Forty-five states and the Department of Justice are claiming that generic drug prices are fixed, and the alleged collusion may have cost U.S. business and consumers more than $1 billion.

In their complaint, prosecutors say that when pharmacies asked drug makers for their lowest price, the manufactures would rig the bidding process.

"The companies would work out in advance who would get the lowest price and then the other competitors may put in what we would call a cover bid," says Michael Cole, who heads the antitrust department at the Connecticut Attorney General's office. (Such bids give the appearance of competitive bidding.)

Through subpoenas, his team has assembled millions of texts, emails and phone calls between 2012 and 2015. The prosecutors say the records show executives divvying up customers, setting prices and giving the illusion that generic pharmaceuticals were transacted in an open and fair marketplace.

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