Pharma companies pay £255m to settle price-fixing charges
Payments mark the sixth and seventh made to resolve price-fixing charges | Teva donates $50 million in drugs to humanitarian organisations.
The US Department of Justice has revealed deferred prosecution agreements addressing criminal antitrust violations against Teva Pharmaceuticals and Glenmark Pharmaceuticals.
These charges involve the price fixing of essential generic drugs.
As part of the agreements, both companies have consented to divest a vital business line linked to the misconduct.
Teva has agreed to a $225 million criminal penalty—the largest penalty to date for a domestic antitrust cartel.
In an unprecedented move, Teva will also donate $50 million worth of medication, clotrimazole and tobramycin, to humanitarian organisations.
Glenmark will pay a $30 million criminal penalty.
Both entities face the prospect of prosecution if they breach the terms of the agreements, and they face potential exclusion from federal healthcare programmes.
The agreements require both companies to take corrective actions, including divesting their drug lines for pravastatin, a widely used cholesterol medicine that was at the core of their price-fixing conspiracy.
Assistant Attorney General Jonathan Kanter, head of the Justice Department's Antitrust Division, commented: "Today, the Antitrust Division and our law enforcement partners hold two more pharmaceutical companies accountable for raising prices of essential medicines and depriving Americans of affordable access to prescription drugs.
“The resolutions include extraordinary remedial measures that require the breakup of assets and restore competition to the industry,” he added.
The investigation involved collaborations between the US Postal Service Office of Inspector General (USPS-OIG), the FBI’s Washington and Philadelphia Field Offices, and the US Attorney’s Office for the Eastern District of Pennsylvania.
Antitrust conspiracies
In the settlements, Teva has admitted to participating in three antitrust conspiracies affecting medications pravastatin, clotrimazole, and tobramycin.
While Glenmark confessed to partaking in a conspiracy to manipulate the price of pravastatin.
Pravastatin is a drug commonly prescribed to mitigate the risk of heart disease and stroke.
Clotrimazole for skin infections and tobramycin for eye infections and cystic fibrosis.
As part of the agreements, joint motions have been filed by the parties, subject to court approval.
These motions aim to postpone prosecution and trial on the charges for the duration of the three-year agreements or until the completion of criminal penalty payments, whichever occurs later.
Pharma giants settle penalties of $681m for price-fixing
In total, seven generic pharmaceutical companies, including Teva and Glenmark, have resolved criminal charges and agreed to pay over $681 million in criminal penalties.
In June 2020, Glenmark faced charges related to its involvement in a conspiracy affecting pravastatin and other generic drugs' prices.
An indictment was brought against both Glenmark and Teva in August 2020, accusing them of similar misconduct.
Teva's involvement was that the company had conspired with Glenmark, Apotex Corp and others to increase prices for pravastatin and other generic drugs.
Count two charged Teva for its role in a conspiracy with Taro Pharmaceuticals, its former executive Ara Aprahamian and others to increase prices, rig bids and allocate customers of generic drugs, including clotrimazole, a medicine used to treat skin infections.
Apotex and Taro acknowledged their roles in these misdeeds, settling for penalties of $24.1 million and $205.7 million.
Aprahamian was indicted in February 2020 and is awaiting trial.
Furthermore, Teva and Sandoz were charged with another conspiracy to increase prices, rig bids, and allocate customers for generic medicines, such as cystic fibrosis drug tobramycin.
Sandoz admitted to its role and agreed to a $195 million penalty, while Teva's actions triggered a $225 million penalty.
Kenneth Cleevely, executive special agent in charge at the USPS-OIG said: "The USPS-OIG will vigorously investigate those who would engage in harmful anticompetitive practices, and we continue to ask for the public’s assistance in identifying and reporting those engaged in this type of activity."
Assistant director Luis Quesada of the FBI’s Criminal Investigative Division echoed the commitment to fairness, saying: "Today’s agreements show that we are committed to ensuring that entities that engage in price-fixing, bid-rigging and market-allocation schemes to the detriment of the American people face justice."
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