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"Massive fraud" by generic drug makers an "attack on the American people," Connecticut AG says

"Massive fraud" by drug makers: Connecticut AG
"Massive fraud" by generic drug makers an "attack on the American people," Connecticut AG says 06:50

Twenty of the biggest generic prescription drug makers are accused of committing a multi-billion-dollar fraud in the U.S. Forty-three states and Puerto Rico filed a complaint Friday alleging the companies coordinated to inflate prices and reduce competition on more than 100 generic prescription drugs.

"It's what we believe to be the biggest corporate cartel in history and probably the biggest antitrust price-fixing case in this country, certainly right now and maybe in our nation's history," Connecticut Attorney General William Tong said Monday on "CBS This Morning." Tong, who described the evidence in Sunday's "60 Minutes" report, is leading the states' coalition against the generic drug companies.

"What's really troubling is it's clear that they're just going to break the law as long as they can afford to do so. You know, these are extraordinarily powerful forces that got away with price increases as high as 1,000, 2,000 [percent]. Last night on '60 Minutes,' they reported that a drug that I take, doxycycline, saw a price increase of 8,000 percent. And they've gotten away with it for such a long time and that's why it took more than 40 states coming together and taking them on, on behalf of the people of this country."

"We're blowing the lid off this whole thing because… this is an attack on the American people. It's a massive fraud that focuses on the drugs that we take every day," he added.

Tong said he was disturbed that "this was undertaken utterly without shame."

"It feels like it's just a routine feature of the industry," he said.

Sweeping lawsuit accuses top generic drug companies, executives of fixing prices 14:12

Tong credited Mike Cole, who leads the antitrust division in the Connecticut Attorney General's office, and Joe Nielsen, his lead prosecutor on this case, for uncovering the alleged collusion and investigating.

"What blew this thing wide open are the phone records. And we've gotten, I think, 11 million phone records, seven million documents and they started piecing it together," Tong said.

Around the times of the price increases of certain generic drugs, Tong said competitors starting calling each other at high rates.

"High-frequency contacts between competitors, sometimes for a minute, two minutes, 45 minutes. Teva talking to Mylan, talking like to Sandoz, back and forth, representatives of these companies having conversations which are highly illegal when you talk about price-fixing," Tong said.

The Department of Justice has launched an investigation and Connecticut has filed two lawsuits.

"We want to hold them accountable. And, as I said last night on '60 Minutes,' we want to claw back the money that they stole from the American people," Tong said.

CBS News reached out to the Association for Accessible Medicines, a trade group that represents generic prescription drug companies. Those companies, which include Teva, Mylan, and Sandoz, deny engaging in any illegal collusion. In a statement, the association said it is "committed to supporting policies that promote competition." It also notes prices have declined overall in the last three years.

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