Pfizer has been dismissed from a broad antitrust lawsuit accusing dozens of drugmakers and executives of fixing prices in the generic drug industry, a ruling that removes the company from one part of a larger case brought by most U.S. states.
Chief Judge Michael Shea of the U.S. District Court in Connecticut ruled June 24 that the states did not present enough evidence to show the New York-based drugmaker or its former Greenstone unit conspired with competitors between 2010 and 2014 to rig bids, divide customers or fix prices for several generic drugs.
Court filings state that patients, insurers and government health programs paid more for generic medicines because companies that were supposed to compete instead coordinated prices and customers. The broader case was brought by 45 states, the District of Columbia and four U.S. territories and names 36 drugmakers and executives.
The portion of the case involving Pfizer centered on six drug products, including generic versions of Eplerenone tablets for high blood pressure, Latanoprost eye drops for glaucoma and several versions of Clindamycin phosphate used to treat acne. The states alleged that Greenstone executives exchanged more than 360 calls and text messages with Sandoz, the Swiss generic drugmaker, as part of the alleged coordination.
Shea found the record did not support the states’ theory that Pfizer directly joined the alleged conspiracy, knew about Greenstone’s alleged collusion when approving price changes, or could be held liable under an agency theory.
Greenstone was Pfizer’s authorized generic business, which sold generic versions of Pfizer-branded drugs. State attorneys general argued that Greenstone’s role tied its former parent company to the alleged conduct, but the court rejected that theory. Shea found that Greenstone had its own profit-driven role in the generic drug market, weakening the argument that the unit was merely carrying out Pfizer’s business.
The ruling turns on a key limit in corporate liability. A parent company is not automatically responsible for conduct by a subsidiary or former business unit. To keep Pfizer in the case, the states needed evidence linking the company to the alleged conspiracy or showing that Greenstone was acting as its legal agent when the challenged conduct occurred.
Federal antitrust law bars competitors from making agreements that restrain competition. Price-fixing claims accuse companies of agreeing not to compete on price. Bid-rigging involves coordination over who will win certain contracts or business opportunities. Customer allocation claims involve agreements to divide customers or markets instead of competing for them.
Generic medicines often become lower-cost alternatives after brand-name protections expire. The legal issue is whether drug prices reflected market competition or an unlawful agreement among sellers.
The states must also show that the alleged price increases were tied to unlawful coordination rather than separate business decisions by competing companies.
Pfizer said it was pleased with the ruling and defended Greenstone as a supplier of affordable generic medicines. The company spun off Greenstone in 2020 as part of the transaction that created Viatris.
The lawsuit continues against the remaining companies and executives in federal court in Connecticut. Shea also oversees two related state attorney general antitrust lawsuits involving generic drugs, including one in which Pfizer remains a defendant.
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