About 5 percent of generic drugs sold in the U.S. during the past three years have undergone price increases that hint at collusion, according to a wide-ranging study that comes in the middle of a Justice Department investigation into pharmaceutical price-fixing.
Fideres Partners LLP, a London consultancy that works with law firms to file litigation against companies, reported "anomalous pricing patterns" in scores of generic drugs sold in the U.S. from 2013 to 2016. It identified 90 medicines for which prices rose at least 250 percent over the three-year period and were increased by at least two drug companies around the same time, even though there was no obvious market reason for the increases. The average price jump among the 90 drugs was 1,350 percent, Fideres found.
"I don't think the public or even the politicians in the U.S. have any idea just how widespread and extreme the phenomenon is," said Alberto Thomas, one of Fideres' founders.
The manufacturers behind the highest number of suspicious increases were Mylan NV with 30, Teva Pharmaceutical Industries Ltd. with 27 and Actavis Inc. with 22, Fideres said. Actavis, now known as Allergan PLC, sold its generic portfolio to Teva in August.
Elizabeth DeLuca, a Teva spokesman, said that the company doesn't comment on individual product pricing and that many factors can affect what a drug costs. DeLuca said the company hasn't found evidence related to the U.S. allegations of civil or criminal liability. Mylan also said that to date, it's not aware of any evidence that it participated in price fixing. Allergan declined to comment.
The increases alone are not proof of collusion, Fideres said. There are many reasons prices can rise: competing suppliers dropping out, manufacturing problems or market fluctuations that are common in the industry.
Still, the analysis provides new data on the scale of price increases that have angered Americans and attracted the attention of politicians such as President-elect Donald Trump and Sen. Bernie Sanders, I-Vt. Trump has suggested bringing down prices by opening up the market to foreign competition. On Wednesday, a U.S. Senate committee released a report calling for pricing legislation, including importation and faster approval of competing drugs.
The antitrust division of the Justice Department has been looking for the past two years into allegations of collusion among manufacturers. So far, a dozen companies have been subpoenaed and 24 specific drugs examined.
Fideres acts as an expert witness in cases against companies in industries including pharmaceuticals. The company declined to disclose details about its clients.
"There is a high degree of concentration, evidence of information sharing among manufacturers and very little opportunity for consumers to go elsewhere," Thomas said.
Mark Abueg, a Justice Department spokesman, declined to comment.
Last week 20 states, led by Connecticut Attorney General George Jepsen, filed a civil complaint alleging executives at companies agreed at trade shows, golf games and private dinners to pump up the cost of antibiotics and medication used to treat diabetes.
Jeffrey Glazer, a former chief executive officer of Heritage Pharmaceuticals Inc., and Jason Malek, an ex-president at the company, were charged in Philadelphia with two counts related to the price-fixing allegations. Lawyers for Glazer and Malek declined to comment when the charges were announced.
"We believe this is just the tip of the iceberg," Jepsen told reporters.
Angered by skyrocketing drug prices, a pair of senators on Wednesday urged Congress to block companies from cornering the market on old, off-patent drugs.
Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Mo., released findings from a yearlong Senate investigation into companies such as Turing Pharmaceuticals, which generated national attention last year after increasing the price of a lifesaving anti-infection drug by more than 5,000 percent.
"We must work to stop the bad actors who are driving up the prices of drugs that they did nothing to develop at the expense of patients just because, as one executive essentially said, 'because I can,'" said Collins, who chairs the Senate's Special Committee on Aging.
Committee investigators concluded that Turing and several other companies "engaged in price gouging ... to make massive profits from decades-old life-saving therapies." The lawmakers presented similar findings at three committee hearings over the past year.
Turing, headed by executive Martin Shkreli, bought Daraprim, a 62-year-old medicine for a deadly parasitic disease, on Aug. 7, 2015, and raised the price overnight from $13.50 to $750 a pill.
When asked by investors about the expected revenue from the drug, Shkreli wrote, "I think it will be huge. ... So 5,000 paying bottles at the new price is $375,000,000 -- almost all of it is profit, and I think we will get 3 years of that or more. Should be a very handsome investment for all of us."
The 131-page Senate report comes as lawmakers and pharmaceutical executives try to gauge Trump's interest in government intervention to curb rising drug prices, a leading health care concern for insurers and patients.
While campaigning, Trump said he would support efforts to allow Medicare -- the government health plan for senior citizens -- to directly negotiate drug prices with manufacturers, a step long opposed by the pharmaceutical lobby. That policy does not appear among the health care proposals currently outlined on Trump's website. The list includes a policy allowing importation of cheaper drugs from Canada and other countries, another proposal opposed by drugmakers.
Representatives for Trump did not respond to requests for comment.
On Tuesday, 19 senators sent a letter to Trump, urging him to follow through on pledges to help lower drug prices.
"During your campaign, you promised to implement bold reforms to bring down the cost of prescription drugs," states the letter, signed by 17 Democrats and independent Sens. Sanders and Angus King of Maine. "We are ready to advance bipartisan reforms that will help achieve the goal we all share: reducing the burden exorbitant drug prices are placing on hard-working Americans."
An AP analysis published last month found that congressional investigations have had little effect on drug prices. A review of nearly 30 brand-name and generic medications targeted by Congress -- including those investigated by the Special Committee on Aging -- showed that most prices have not budged since coming under federal scrutiny.
Information for this article was contributed by Liam Vaughan and Jared S. Hopkins of Bloomberg News; by Matthew Perrone of The Associated Press; and by Melody Peterson of the Los Angeles Times.
A Section on 12/23/2016