Generic drugmaker to pay $3m antitrust fine
New Jersey-based generic drugmaker Rising Pharmaceuticals has admitted to conspiring to fix prices and allocate customers for a generic hypertension drug.
On Tuesday, December 3, the US Department of Justice (DoJ) announced that Rising had agreed to pay more than $3 million in criminal penalties, restitution, and civil damages.
Rising admitted to engaging in a criminal antitrust conspiracy with a competing generic maker and its executives to fix prices for Benazepril-Hydrochlorothiazide (HCTZ).
The charge is the fourth in DoJ’s antitrust division’s ongoing criminal investigation in the generic pharmaceuticals industry.
Previously, two executives pleaded guilty to criminal antitrust violations, and Heritage Pharmaceuticals was charged and entered into a deferred prosecution agreement.
Assistant attorney general Makan Delrahim of the antitrust division said: “Today’s charge, like the previous corporate and individual charges announced in this investigation, publicly affirms the antitrust division’s steadfast commitment to prosecuting the companies and executives who fixed prices of generic pharmaceuticals.”
The antitrust division has entered into a deferred prosecution agreement resolving the charge against Rising. Under the agreement, Rising will pay $1.5 million as restitution to the victims of the charged conduct.
However, to account for Rising’s separate agreement with the DoJ’s civil division, which requires Rising to pay approximately $1.1 million in civil damages for False Claims Act violations, the deferred prosecution agreement calls for an offset of Rising’s restitution, to around $440,000.
Finally, Rising will also pay a $1.5 million monetary penalty. This has been reduced from the fine of approximately $3.6 million called for under the US Sentencing Guidelines, because of Rising’s financial condition and liquidation.
The US will defer prosecuting Rising for three years or until its ongoing bankruptcy, to ensure that Rising can comply with the agreement’s terms.
Delrahim added: “The deferred prosecution agreement is an important step in restoring integrity to the generics industry. It will require from Rising not only an admission of guilt, a criminal penalty and cooperation in the ongoing investigation, but also restitution to the direct purchasers that bought Benazepril HCTZ at artificially inflated prices.”
Rising’s cooperation has allowed the US to advance its investigation into criminal antitrust conspiracies among other makers of generic pharmaceuticals, according to the DoJ.
William McSwain, US attorney for the Eastern District of Pennsylvania, added: “We remain focused on price-fixing and market allocation in generic drugs and addressing the impact on federal healthcare programs like Medicare and Medicaid.
“This resolution with Rising is another important accomplishment in that area, which will only serve to accelerate our ongoing investigation.”
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