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20 States Allege In Lawsuit Generic Drug Makers Conspiring To Inflate Prices

PHILADELPHIA (CBS) -- Generic drug makers are being accused of fixing prices, making billions in profits, while charging patients sky-high prices for medications.

CBS 3' Stephanie Stahl reports that states are fighting back, as several filed a lawsuit Thursday, accusing the drug companies of conspiring to inflate prices.

The price of generic drugs has skyrocketed as the antibiotic erythromycinis went up by 1,000 percent and the heart drug digoxin increased 600 percent.

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"This is $490 for one box of insulin," said pharmacist Christ Antypas. "This might last a month. One box might last a patient two weeks.

From 2010 to 2011, prices for 45 generic drugs went up 100 percent or more, according to the Government Accountability Office.

Experts blame a lack of competition.

"If you can continue a monopoly even for a few months with a very expensive high-volume drug, that can be worth millions, even billions of dollars," said Dr. Martin Gaynor of Carnegie Mellon University. "So some pharmaceutical companies engage in tactics that are designed to maintain monopolies to prevent competition."

Twenty states, including Pennsylvania and Delaware, have joined a lawsuit against six generic drug makers, alleging they artificially inflated and manipulated prices to reduce competition on two drugs – an antibiotic and diabetes medication.

The lead attorney general from Connecticut says, "We have evidence of widespread participation in illegal conspiracies across the generic drug industry."

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Antypas says patients who can't afford their drugs are suffering.

"They'll confide in us that they're not going to take it," said Antypas.

A statement from the Generic Pharmaceutical Association says in party it can't comment on the investigation, adding, "Competition from generics saves hundreds of billions of dollars each year. We support laws and regulations that promote competition."

More charges are expected in this ongoing investigation.

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