UnitedHealth sues dozens of drug companies for price-fixing

Health insurance giant United HealthCare Services filed a federal lawsuit Jan. 16 against more than 40 drug companies, alleging they violated federal and state antitrust laws.

Four things to know:

1. UnitedHealth alleges the drug companies conspired to fix prices on a slew of generic drugs.

"According to reports, over steak dinners, cocktails and rounds of golf, executives at the defendant companies developed a term — 'sandbox' — as a shorthand way to describe how they unlawfully conducted business," the complaint states. "The conspirators were expected to 'play nice' in the sandbox. This was code for participation in an ongoing anticompetitive conspiracy: The companies agreed to fix prices and allocate a 'fair share' in markets for generic pharmaceuticals to ensure profitability and undermine competition."

2. To support its claims, UnitedHealth references a 47-state investigation involving at least 16 generic drug companies and 300 drugs.

3. UnitedHealth argues the alleged illegal business dealing allowed the drug companies to raise prices for several generic drugs.

"Each of the generic price increases covered by this complaint is not explained by changes in supply, the costs of production, or demand," the complaint states. "Indeed, there are no market forces that explain the pricing of the drugs identified in this complaint other than collusion."

4. UnitedHealth is seeking "all unlawful overcharges incurred in connection with paying for price-fixed generic drugs dispensed to UnitedHealthcare insureds."

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