Recent Generic Conspiracy Indictment Highlights Risk of Discussing Pricing or Bids with Competitors

On February 4, 2020, a grand jury from the United States District Court in the Eastern District of Pennsylvania indicted Ara Aprahamian for price fixing under the Sherman Act and false statements. Section 1 of the Sherman Act prohibits conspiracies in restraint of trade, including price fixing and bid-rigging. This indictment is part of an industry wide investigation conducted by the Antitrust Division of the Department of Justice. Aprahamian is a former executive with Taro Pharmaceutical Industries Ltd.

The indictments involve a DOJ allegation that the defendant participated in two conspiracies to fix generic prices and rig bids between 2013 and 2015. Mr. Aprahamian was also charged with a false statement to an FBI agent regarding discussions with a competitor about pricing.  Some of the products that were, according to the indictment, extensively discussed among competitors, included carbamazepine extended release tablets, clobetasol, and fluocinonide gel and fluocinonide ointment. At this point, the defendant has not been convicted of the offenses alleged and is pending trial.

These indictments highlight the risk that discussions with competitors that involve pricing or bids can be construed as illegal per se under the Sherman Act. The DOJ enforces these acts criminally. These discussions should not take place informally or at trade association meetings. A conviction for these offenses generally result in a jail sentence.

For more information, please contact Jeffrey S. Jacobovitz, Chair of AGG’s Antitrust Group.  Mr. Jacobovitz is a former attorney with the Federal Trade Commission and was also a Vice-Chair of the ABA Antitrust Cartel and Criminal Practice Committee.