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Utah Attorney General

AG Reyes Joins with 39 Other State Attorneys General as Plaintiff in Federal Generic Drug Antitrust Lawsuit

States file amended complaint in lawsuit against six generic drug companies, now alleging new violations of state antitrust and consumer protection laws

SALT LAKE CITY March 2, 2017 – Attorney General Sean Reyes announced today that Utah has joined a federal antitrust lawsuit alleging that six generic drug-makers entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two generic drugs.

An amended complaint filed in with the federal court increases from 20 to 40 the number of plaintiff states in the lawsuit, which was initially filed in December 2016. The amended complaint also adds claims of alleged violations of state antitrust laws – in addition to the alleged violations of federal antitrust laws – in each of the 40 states, as well as state consumer protection laws in most of the states, against the defendant generic companies Heritage Pharmaceuticals, Inc., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Mayne Pharma (USA), Inc., Mylan Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc.

Connecticut is leading the multistate group of plaintiff states, which now also includes Alabama, Arizona, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington and Wisconsin.

“Along with 39 other states, we have laid out a strong and compelling case. In our amended complaint, we allege that these drug companies engaged in anti-competitive behavior, driving drug prices artificially high for certain generic drugs to the serious detriment of consumers,” said Attorney General Sean Reyes. “With the filing of this amended complaint, my office hopes to send a message of zero tolerance for trade practices we believe harm Americans and particularly those that hurt residents of Utah.      

“I appreciate the hard work of my Anti-Trust team, including Section Director Ronald Ockey, former Division Director David Sonnenreich, Assistant Attorney General Eddie Vasquez, and their stellar paralegal, Brian Blake, who have worked diligently with Connecticut and the other plaintiff states to bring this case forward.  The Utah AG’s office is dedicated to protecting consumers and companies from unlawful business practices such as those alleged in this case.”

In July 2014, the state of Connecticut initiated an investigation of the reasons behind suspicious price increases of certain generic pharmaceuticals. The investigation, which is still ongoing as to a number of additional generic drugs, generic drug companies, and key executives, uncovered evidence of a well-coordinated and long-running conspiracy to fix prices and allocate markets for doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication.

The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences, and other events, as well as through direct email, phone and text message communications. The alleged anticompetitive conduct – including efforts to fix and maintain prices, allocate markets and otherwise thwart competition – caused significant, harmful and continuing effects in the country’s healthcare system, the states allege.

The lawsuit was filed under seal in the U.S. District Court for the District of Connecticut. Portions of the complaint are redacted in order to avoid compromising the ongoing investigation.

See below to view a copy of the redacted amended complaint. 

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Utah Attorney General's Office

AG Reyes Announces a $100M Settlement with Barclays for Manipulating LIBOR

LIBOR manipulation hurt government entities and not-for-profit organizations
in Utah and across the country

SALT LAKE CITY August 8, 2016 – Attorney General Sean D. Reyes today announced a $100 million settlement with Barclays Bank PLC and Barclays Capital Inc. for fraudulent and anticompetitive conduct involving the manipulation of LIBOR.  This is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers.

“It is important for a successful free market that financial institutions play by the rules, especially those that help set rates upon which the market relies. Companies that break the rules, cheat or otherwise manipulate positions of trust should be held accountable for their mistakes,” said Attorney General Reyes. “Our congratulations to the entire Anti-Trust Section of the Attorney General’s Office for their team work in seeing this difficult settlement through.”

The investigation, conducted by a multistate working group of 44 State Attorneys General, led by the Attorneys General of New York and Connecticut, revealed that Barclays manipulated LIBOR through two different kinds of fraudulent and anticompetitive conduct.  First, during the financial crisis period of roughly 2007-2009, Barclays’ managers frequently told LIBOR submitters to lower their LIBOR settings in order to avoid the appearance that Barclays was in financial difficulty and needed to pay a higher rate than some of its peers to borrow money.  The LIBOR submitters complied with the instructions and suppressed their LIBOR submissions during that period.  Second, at various times from 2005 to 2007 and continuing at least into 2009, Barclays’ traders asked Barclays’ LIBOR submitters to change their LIBOR settings in order to benefit their trading positions, and the submitters often agreed to the requests.  At times, those requests came from traders outside the bank, and Barclays traders agreed to pass them along to Barclays’ submitters, thus colluding with other banks.  Barclays also believed that other banks’ LIBOR submissions likewise did not reflect their true borrowing rates and that therefore, published LIBOR did not reflect the cost of borrowing funds in the market, as it was supposed to do.

Government entities and not-for-profit organizations in Utah and throughout the U.S., among others, were defrauded of millions of dollars when they entered into swaps and other investment instruments with Barclays without knowing that Barclays and other banks on the U.S. dollar (USD)-LIBOR-setting panel were manipulating LIBOR and colluding with other banks to do so.

Governmental and not-for-profit entities with LIBOR-linked swaps and other investment contracts with Barclays will be notified if they are eligible to receive restitution from a settlement fund of $93.35 million.  The balance of the settlement fund will be used to pay costs and expenses of the investigation and for other uses consistent with state law.

Barclays is the first of several USD-LIBOR-setting panel banks under investigation by the State Attorneys General to resolve the claims against it, and Barclays has cooperated fully from the outset.  The State Attorneys General will benefit from the information and evidence provided by corporations that elect to cooperate with the investigations.  Such cooperation can facilitate civil enforcement efforts, including restitution for victims of the offense.  

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Utah Attorney General's Office

AG Reyes Secures Recovery for Utah Consumers and the State for Cephalon Efforts to Delay Generic Drug Competition For Provigil

SALT LAKE CITY August 4, 2016 – Attorney General Sean D. Reyes today announced a $125 million settlement between Utah, 47 other States and the District of Columbia (the “States”)  and Cephalon and affiliated companies (“Cephalon”) that ends a multistate investigation into anticompetitive conduct by Cephalon to protect the monopoly profits it earned from its landmark wakefulness drug, Provigil.  That conduct delayed generic versions of Provigil from entering the market for several years.

“While we still require court approval of the settlement, we are pleased to announce that Cephalon and the States involved have reached an agreement,” said Attorney General Reyes. “Our congratulations to the entire Anti-Trust Section of the Attorney General’s Office for their team work in seeing this difficult settlement through.”

As the time neared for patent and regulatory barriers to expire and thus open the way for generic competition to Provigil, Cephalon intentionally engaged in an alleged illegal scheme to delay the entry of generic competitors to Provigil that included fraudulently securing an additional patent, filing patent infringement claims against potential generic competitors and  paying  them to delay selling their generic versions of Provigil until at least April 2012, six years later than they would have absent the scheme.  Because of this delayed entry, consumers, states and their governmental entities and others paid hundreds of millions more for Provigil than they would have had generic versions of the drug launched earlier in 2006, as expected.

The States’ settlement includes $35 million for distribution to consumers, including Utah residents, who bought Provigil .  The States hope this $35 million consumer recovery will be supplemented with recovery from a settlement of a private class action against Cephalon that includes Utah, 24 other States and the District of Columbia.

The total estimated recovery for Utah under the States’ settlement will be about $1.55 million, including compensation for Provigil purchases by these Utah consumers and certain Utah government entities, and for the State.

This multistate settlement was facilitated by litigation brought against Cephalon by the Federal Trade Commission.  In May 2015, the FTC settled its suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account.  The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations, such as those of the States and private class action cases.

The settlement is subject to court review, including providing consumers with notice and an opportunity to participate in, object to, or opt out of settlement.  The States expect court review will be provided by Judge Mitchell Goldberg of the Eastern District of Pennsylvania, who is currently overseeing other litigation concerning Provigil against Cephalon and others.

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