Louisiana Attorney General Jeff Landry said Tuesday generic drug manufacturers act together as a "cartel" to fix prices and divide market share in a way that costs patients and insurance companies billions of dollars.
Landry and Connecticut Attorney General George Jepsen, who leads the antitrust lawsuit, said the original complaint will be updated and expanded to accuse a majority of generic companies of fixing the prices on 300 or more drugs.
They said 48 states and territories have joined the lawsuit.
"The industry has created a kind of cartel to divide the market share and fix prices," said Landry, who is president of the National Association of Attorneys General.
Jepsen said the industry is "pervasively corrupt" in colluding to fix prices.
Generic drugs account for almost 90 percent of prescriptions.
The Association for Accessible Medicines, formerly the Generic Pharmaceutical Association, which represents the industry, denies the accusations.
"AAM and its member companies support vibrant competition and, of course, oppose price-fixing," Rachel Schwartz said in a statement. "AAM has established policies to help ensure compliance with our nation’s competition laws. As patients know from their own trips to the pharmacy, where 93 percent of generic prescriptions are filled for $20 or less, no category of health care provides lower prices and savings year-over-year than FDA-approved generic medicines."
But Jepsen said the generic companies through collusion inflate prices by as much as 600 percent.
"Evidence we've compiled shows supposed competitors are on the phone with each other hundreds of times and (the calls) tend to bunch up before price spikes," Jepsen said.
The Connecticut attorney general said his investigators have also secured emails and texts between competitors detailing price fixing and the timing of price increases in which they ask each other "if they're on board."
"It's literally costing (consumers and insurance companies) billions and billions of dollars a year," Jepsen said. "It's embedded in the culture of the industry."
He said there are "40-plus" manufacturers and "virtually every one of them is headquarters in the suburbs of Philly."
Landry and Jepsen said they expect the expanded complaint to be filed during the first half of 2019.
They believe the evidence they've gathered will put pressure on the generic drug companies to settle.
"One would hope once they understand the weight of the evidence it will lead to settlements," Jepsen said. "(The complaint) will show the full breadth and scope of how this collusion has been baked into he industry.
"There are a lot of nervous people out there," he said.
Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1