Teva Pharmaceuticals (TEVA - Get Report) was falling sharply Monday after attorneys general from 44 alleged the nation's largest generic drugmakers conspired to artificially inflate and manipulate prices for more than 100 different generic drugs.
The lawsuit was filed Friday in federal court in Connecticut.
Connecticut Attorney General William Tong said investigators obtained evidence implicating 20 companies, according to the Associated Press.
"We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people," Tong said. "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."
New Jersey officials said that costs for drugs were sometimes boosted by more than 10 times what they should have been, and that company officials, knowing they were violating the law, spoke in person or by cellphone "so as not to create a written record of their conduct," according to a report from NorthJersey.com.
The conspiracy was hatched at trade shows, cocktail parties and golf outings, according to a statement by state Attorney General Gurbir S. Grewal, who said one of the meetings included more than a dozen high-ranking company executives.
A spokesman for Teva Pharmaceuticals USA said the company hasn't engaged in any conduct that would lead to civil or criminal liability.
"The allegations in this new complaint, and in the litigation more generally, are just that - allegations," Kelley Dougherty, a Teva vice president, said in a statement Saturday. "The company delivers high-quality medicines to patients around the world and is committed to complying with all applicable laws and regulations in doing so."
American depositary receipts of Teva declined 16.8% to $11.96 in trading Monday.
ADRs of Novartis declined 2%, Mylan shares fell 10.8% and Pfizer fell 0.8%.