Generic drug makers Ranbaxy of India and Teva of Israel have agreed to settle allegations they made an illegal pact to restrict competition in New York state, authorities said Wednesday.
New York state Attorney General Eric Schneiderman said the US units of Ranbaxy Pharmaceuticals and Teva Pharmaceuticals had made a deal to not challenge each other's market positions with respect to dozens of generic drugs they sold in the United States, to protect their sales.
The settlement required the two to end the collusion, commit not to enter into similar agreements in the future, and pay the state a total of $300,000, or $150,000 each.
"Agreements between drug manufacturers to protect each other's market positions violate fundamental principles of antitrust law and can lead to higher drug prices," Schneiderman said.
Schneiderman vowed to "intervene aggressively" to eliminate collusion in the drug industry.
Ranbaxy and Teva, the world's largest generic drug manufacturer, had collaborated to not challenge "first to file"regulatory exclusivities held by the other for "a large number of drugs", Schneiderman said.
"First to file" exclusivity protects a manufacturer seeking to market a generic version of a branded drug prior to the expiration of the branded drug's patents. The protection bars competition from rival generic drug makers for 180 days, effectively allowing the generic to be sold a higher prices.
But the two companies sought to extend this exclusivity over several years, according to the case.
A Teva spokeswoman declined to comment. A request for comment from Ranbaxy was not immediately answered.