WASHINGTON — Two former generic drug company executives were charged Wednesday for their alleged roles in a price-fixing and bid-rigging scheme involving an antibiotic and diabetes medication.
Jeffrey Glazer, the former chief executive officer at Heritage Pharmaceuticals, and Jason Malek, the company's former president, were named in separate, two-count felony cases related to the alleged scheme involving doxycycline hyclate, the antibiotic used to treat bacterial infections, and glyburide, the diabetes medication.
The alleged conspiracy, outlined in court papers filed in Philadelphia, ran from as early as April 2013 to December 2015.
"By entering into unlawful agreements to fix prices and allocate consumers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines,'' Deputy Assistant Attorney General Brent Snyder said.
The charges are the first to be announced in a broad and continuing federal inquiry aimed, Snyder said, to "ensure that generic pharmaceutical companies compete vigorously to provide these essential products a price set by the market, not by collusion.''
Both executives had been fired by Heritage in August following an internal investigation that, according to the company, revealed "a variety of serious misconduct by the individuals charged today.''
"We are fully cooperating with all aspects of the Department of Justice's continuing investigation,'' Heritage said in a written statement. "Recently, Heritage initiated its own legal action against these same individuals to seek redress for an elaborate embezzlement and self-dealing scheme. We are deeply disappointed by the misconduct and are committed to ensuring it does not happen again.''
In a separate lawsuit Heritage filed against Glazer and Malek, the company accused the men of looting "tens of millions of dollars...by misappropriating its business opportunities, fraudulently obtaining compensation for themselves and embezzling its intellectual property.''
"Glazer and Malek accomplished this brazen theft by creating at least five dummy corporations, which they used to siphon off Heritage’s profits through numerous racketeering schemes,'' the company's lawsuit alleges.
Minnesota Sen. Amy Klobuchar, the ranking Democrat on the Judiciary Committee's Anti-trust Subcommittee, cited the skyrocketing costs of the antibiotic doxcycline during the alleged conspiracy, jumping from $20 for 500 tablets, to $1,845 between October 2013 and May 2014.
“Price fixing rigs the system against Americans struggling to pay rising prescription drug costs,'' Klobuchar said.