Last December federal prosecutors unsealed a criminal information against former executives of Heritage Pharmaceuticals, a generic drug maker in Eatontown, N.J. The criminal information is set to reverberate through the pharmaceutical world, potentially impacting companies like Mylan, Teva Pharmaceutical, Citron Pharma and two companies controlled by a pair of Indian billionaires, Emcure and Aurobindo Pharma.
In a companion civil case, the former executives have agreed to cooperate with 41 states in their ongoing investigation and litigation regarding possible antitrust activity in the generic drug industry, various state attorneys general said Wednesday.
Jason Malek, Heritage’s former president, and Jeffrey Glazer, its ex-CEO, reached a settlement under which they will provide documents, testimony and other evidence about the potentially sprawling scheme, the states said. The men will also each pay a $25,000 civil penalty to the states. The multistate lawsuit alleges widespread collusion among a large group of pharmaceutical companies to reduce competition and increase the price of generic drugs.
The two also entered into plea agreements with the U.S. Department of Justice after being charged with two counts of criminal violations of the Sherman Antitrust Act, according to a state news release.
The investigation by states would continue to examine a number of additional generic drugs, generic drug companies and executives. An article in Forbes earlier this year claims that federal authorities intend to use Glazer to crack open their big antitrust case against generic drugmakers.
The federal government’s court filings suggest that Glazer is cooperating in the government’s investigation of price collusion by generic drug makers that has been disclosed in the securities filings of several publicly-traded generic drug companies. Mylan and Teva are among the companies that have disclosed receiving subpoenas from the Department of Justice’s antitrust division investigation that seems poised to spill political heat into the generic drug sector.
Malek and Glazer were also named in a RICO case filed by their former employer in November 2016. The suit alleges that before they were fired in August 2016 “Glazer and Malek looted tens of millions of dollars from Heritage 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.”
A lawyer by training who graduated from Seton Hall University Law School, Glazer started his career working at New York City law firms and as a lawyer for a pharmaceutical company in New Jersey. Glazer founded Heritage in 2005. He sold the company to Emcure Pharmaceuticals in 2011. Emcure is a generic drug company based in Pune, India, that is run by billionaire Satish Mehta, who is the biggest shareholder of the company.