Boxes of tablets produced by Teva Pharmaceutical Industries.
Chris Ratcliffe | Bloomberg | Getty Images
Drugmaker Teva Pharmaceuticals agreed to pay $225 million in criminal fines to resolve charges related to cost fixing three medications, including a generic cholesterol drug that it has agreed to divest, the U.S. Department of Justice announced Monday.
Glenmark Pharmaceuticals pays $30 million to resolve charges alleging that it conspired with Teva to repair prices for that cholesterol drug, called pravastatin. Glenmark may even divest its version of that drug.
Teva’s nice is the biggest thus far for a domestic antitrust case. Each settlements are the most recent resolution in a string of cases related to cost fixing, which refers to competitors banding together to artificially set the value of a product.
Since 2020, the DOJ’s antitrust division has charged five other pharmaceutical corporations for participating in similar schemes affecting several generic drugs. Monday’s agreement means seven corporations have resolved their criminal charges and collectively agreed to pay greater than $681 million in criminal penalties.
“Today, the Antitrust Division and our law enforcement partners hold two more pharmaceutical corporations accountable for raising prices of essential medicines and depriving Americans of reasonably priced access to prescribed drugs,” Jonathan Kanter, assistant attorney general of the DOJ’s antitrust division, said in a release.
The deals are deferred prosecution agreements, which implies the 2 corporations is not going to face trial or criminal punishment within the case in the event that they abide by the terms of the agreements. If Teva and Glenmark are convicted, they’ll likely face mandatory debarment from federal health-care programs, in accordance with the DOJ.
Teva has also agreed to donate $50 million value of two generic drugs affected by price fixing to humanitarian organizations that provide medications to Americans in need. The corporate said during an earnings call earlier this month that it has put aside $200 million to resolve the DOJ’s price-fixing allegations.
Teva, in a press release Monday, said it’ll pay $22.5 million annually between 2024 and 2027, and $135 million in 2028.
“Teva has robust and consistent compliance controls in place designed to stop this kind of activity from reoccurring, and has committed, as a part of the [deferred prosecution agreement], to keep up those controls going forward,” the corporate said, adding it’s “pleased to place these charges behind us.”
Glenmark, in a press release, said it’s “committed to being a socially and ethically responsible company and has devoted considerable resources to strengthen our compliance practices, ensuring the best ethical operating standards.
As a part of Monday’s agreements, Glenmark admitted to participating in a scheme to repair the value of pravastatin. Meanwhile, Teva admitted to participating in three price-fixing schemes that affected pravastatin and two other drugs: skin infection treatment clotrimazole and tobramycin, a medicine commonly prescribed to treat eye infections.
The DOJ in June 2020 charged Glenmark with one count of price fixing in a filing within the Eastern District of Pennsylvania. That criticism alleged that Glenmark and other corporations raked in $200 million from the illegal scheme.
In August, a grand jury within the Eastern District of Pennsylvania returned a superseding indictment against Glenmark and Teva for a similar conduct and similar actions.
One count alleged that Teva conspired with Glenmark, one other company called Apotex Corp. and others to extend prices of pravastatin and other generic drugs. Apotex admitted to its role within the scheme and agreed to pay a $24.1 million penalty in May 2020.
One other count alleged that Teva conspired with Taro Pharmaceuticals U.S.A. and its former executive Ara Aprahamian, amongst other parties, to cost fix clotrimazole and other generic drugs. Taro admitted to its role within the conspiracy and agreed to pay a $205.7 million penalty in July 2020. Aprahamian was indicted in February 2020 and is awaiting trial.
A 3rd count alleged Teva conspired with Sandoz and other corporations to cost fix tobramycin and other generic medicines. A former Sandoz executive pleaded guilty for his participation within the conspiracy in February 2020. Sandoz admitted to its role within the conspiracy and agreed to pay a $195 million penalty in March 2020.