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UPDATE 1-Teva, other drug companies accused in sweeping U.S. price-fixing scheme -lawsuit

scheme -lawsuit@ (Adds details of lawsuit, industry background, comment by New Jersey attorney general)

WASHINGTON, May 11 (Reuters) - U.S. states filed a lawsuit accusing 20 drug companies including Teva Pharmaceuticals USA Inc of a sweeping scheme to inflate drug prices - sometimes by more than 1,000 percent - and stifle competition for generic drugs, state prosecutors said on Saturday.

The drug companies engaged in illegal conspiracies to unreasonably restrain trade, inflate and manipulate prices and reduce competition, according to the complaint by 44 U.S. states, filed on Friday in the U.S. District Court in Connecticut.

"Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States," the lawsuit said.

Representatives of Teva and Sandoz, another company named in the lawsuit, did not immediately respond to a request for comment. Teva USA is a unit of Israeli pharmaceutical company Teva Pharmaceutical Industries Ltd.

The drugs included everything from tablets and capsules to creams and ointments to treat conditions including diabetes, high cholesterol, high blood pressure, cancer, epilepsy and more, they said. In some instances, the coordinated price increases were more than 1,000 percent, the lawsuit said.

The lawsuit also names 15 individuals as defendants who it said carried out the schemes on a day-to-day basis.

"The level of corporate greed alleged in this multistate lawsuit is heartless and unconscionable," Nevada Governor Steve Sisolak said in a statement.

According to New Jersey Attorney General Gurbir Grewal, more than half of the corporate defendants are based in New Jersey, and five of the individual defendants live in the state.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

Generic drugs can save drug buyers and taxpayers tens of billions of dollars a year because they are a lower-priced alternative to brand-name drugs.

"Generic drugs were one of the few 'bargains' in the United States healthcare system," the lawsuit said.

At some point, however, that changed.

"Prices for hundreds of generic drugs have risen while some have skyrocketed, without explanation, sparking outrage from politicians, payers and consumers across the country whose costs have doubled, tripled, or even increased 1,000% or more," it said.

As a result of the drug companies' conspiracies, it said, consumers and states paid "substantially inflated and anticompetitive prices for numerous generic pharmaceutical drugs" while the drug companies profited.

(Reporting by Doina Chiacu in Washington Additional reporting by Ishita Palli in Bengaluru and Nate Raymond in Boston Editing by Matthew Lewis)