On Monday, shares of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) plunged 14.83 percent to close at 12.23 a share. Teva Pharmaceutical is an international drug manufacturer that is based in Israel. It manufactures generic drugs for supply to the masses. It largely transacts in the procurement of the ingredients used in the processing of pharmaceuticals.
The 44 U.S. states, led by Connecticut Attorney General William Tong, are accusing the drug maker of orchestrating a scheme to inflate prices. The 44 states are suing Teva Pharmaceuticals and 19 other drug makers of illegally colluding to coordinate the price of drugs at the expense of the general public that is in need of quality medication.
“We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people,” Tong said in a statement. “We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”
According to the lawsuit filed, Teva manipulated industry players to hike the prices of 86 drugs in a span of two years. The states believe that the conspiracy had severe effects on Americans and the state of healthcare.
Teva Pharmaceuticals has denied the claims. In response to the lawsuit a spokesperson for Teva said “the allegations in this new complaint, and in the litigation more generally, are just that – allegations.” “Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability,” the spokesperson said. “Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable laws and regulations in doing so.”