Connecticut Attorney General George Jepsen, who is leading a coalition of states suing generic drugmakers, told CNBC on Tuesday that the industry is rife with collusion.
"We've uncovered through emails, text messages and telephone patterns, plus cooperating witnesses, a very compelling case of systematic and pervasive price fixing within the industry," Jepson said in a "Power Lunch" interview.
On Tuesday, 45 states, including Connecticut, as well as the District of Columbia and Puerto Rico
Shares of Mylan were down about 8 percent after news broke of allegations against Malik.
Bernstein senior analyst Ronny Gal said the stock's drop was justified.
"It's a relatively small industry where people move from company to company, and generally know each other," Gal said on "Power Lunch." "When people are trying to make their numbers, and they are sitting in the same location, yeah, once in a while a conversation crosses over the line."
Gal clarified that he had not personally witnessed an incriminating conversation, but that he could "completely see how something like this could happen."
In a statement, Mylan said it found no evidence of price fixing by the company or any of its employees, and vowed to defend itself vigorously. "Mylan has deep faith in the integrity of its president, Rajiv Malik, and stands behind him fully," the company's statement said.
As for how much the alleged collusion cost consumers, Jepson couldn't be specific. But he did emphasize that in an industry valued at about $75 billion, where 88 percent of prescriptions are written for generic drugs, the cost was likely massive.
Since there is evidence the collusion stretches back about a decade, Jepson said he's confident more players are involved. "We are uncovering new information almost every day," he added. "I can't stress enough this is just the tip of the iceberg."
The original complaint, filed in December, had focused on six companies and two medicines.
— Reuters contributed to this report.