Connecticut Attorney General William Tong told 60 Minutes that his office has found evidence of a drug industry-wide conspiracy to defraud consumers and the government by hiking the price of hundreds of generic drugs, in some cases by more than 8,000% in a single year. Now he is suing big drug companies on behalf of the state of Connecticut along with more than 40 other states to recoup the “billions and billions of dollars in damages to the people of Connecticut and states across America.”
The generic drug industry was established by Congress in 1984 in an attempt to bring down the cost of medications once the patents on brand-name drugs expired. But in recent years, the cost of generic drugs has skyrocketed to the tune of about 400% on average in a single year.
Tong said even he is a victim. He takes the antibiotic doxycycline for a skin condition. Between 2013 and 2014, a bottle of doxycycline jumped from just $20 a bottle to more than $1,800 a bottle – an increase of 8,281%. He discovered that the cost of other generics was also spiking – the asthma drug albuterol sulfate increased more than 4,000% from $11 to $434, and the cholesterol drug Pravastatin increased more than 500%, from $27 to $196.
Mike Cole, the head of the antitrust division in the Connecticut Attorney General’s office, and Joe Nielsen, his lead prosecutor on the case, investigated. Using software used by law enforcement to investigate drug cartels, and subpoenas, they discovered a trend in the millions of internal documents and phone records of drug industry sales directors, marketers and CEOs. Generic drug company officials were conspiring to hike prices of their drugs in tandem, leaving consumers and the government with little choice but to cover the cost of the medications.
“The generic drug industry is the largest private sector corporate cartel in history,” Tong told 60 Minutes. “It’s devastating. It affects health insurance premiums and health insurance plans. It impacts Medicare and Medicaid. And it is a chain reaction that drives up the price of American health care to unnatural heights.”
Tong said it is time for a change. “We’re gonna take them on in court and hold them accountable. And they’re gonna pay for the money the stole from the American people.”