Teva charged in DoJ antitrust probe into generic drug price-fixing
Teva Pharmaceuticals has been charged with conspiring to fix prices, rig bids, and allocate customers for generic drugs, the US Department of Justice (DoJ) has announced.
According to the indictment filed yesterday, Tuesday 25 August, at the US District Court for the Eastern District of Pennsylvania, the Israeli company’s US unit allegedly participated in three conspiracies from May 2013 until December 2015.
As a result of these conspiracies, the DoJ has claimed that consumers were allegedly overcharged at least $350 million. According to count one of the indictment, Teva is accused of conspiring with Glenmark, Apotex, and unnamed co-conspirators to increase prices for pravastatin, a cholesterol medication that lowers the risk of heart disease and stroke.
On May 7, Apotex admitted to its role in this conspiracy and agreed to pay a $24.1 million penalty. On July 14, a grand jury returned an indictment against Glenmark for its role in the same conspiracy.
Count two on the indictment charges Teva for its role in an alleged conspiracy with Taro Pharmaceuticals along with Taro’s former marketing executive Ara Aprahamian. According to the charge, Teva and its co-conspirators agreed to increase prices, rig bids, and allocate customers for generic drugs including, but not limited to, drugs used to treat and manage arthritis, seizures, pain, skin conditions, and blood clots.
On July 23, Taro admitted to its role in this conspiracy and agreed to pay a $205.7 million penalty. Aprahamian was indicted in February 2020 for his role in the conspiracy, and is awaiting trial.
Count three of the indictment charges Teva for its role in a conspiracy with Sandoz. According to the charge, Teva and its co-conspirator agreed to increase prices, rig bids, and allocate customers for generic drugs including, but not limited to, drugs used to treat brain cancer, cystic fibrosis, arthritis, and hypertension.
In March 2020, Sandoz admitted to its role in this conspiracy, as well as in conspiracies with other generic drug manufacturers, and agreed to pay a $195 million penalty.
“Today’s charge reaffirms that no company is too big to be prosecuted for its role in conspiracies that led to substantially higher prices for generic drugs relied on by millions of Americans,” said Assistant Attorney General Makan Delrahim of the DoJ’s antitrust division.
“The division will continue to work closely with our law enforcement partners to ensure that companies that blatantly cheat consumers of the benefits of free markets are prosecuted to the full extent of the law,” he added.
Teva becomes seventh company to be charged in antitrust investigation
James Dawson, acting assistant director in charge of the FBI’s Washington Field Office, said: “Price fixing and bid rigging is a crime, and the American people—who rely on these drugs to treat serious ailments—are the ones who pay the price when companies like Teva conspire to raise their costs. The FBI remains committed to holding companies accountable for their illegal and reprehensible activity.”
Each of the charged offences carry a statutory maximum penalty of $100 million for companies. According to the DoJ, the maximum fine may be increased to double the gain derived from the crime or double the loss suffered by the victims of the crime if either amount is greater than $100 million.
This case is the result of an ongoing federal antitrust investigation into price fixing, market allocation, bid rigging, and other anticompetitive conduct in the generic pharmaceutical industry, carried out by the DoJ’s antitrust division with the assistance of the US Postal Service Office of Inspector General, the FBI and the US Attorney’s Office for the Eastern District of Pennsylvania.
Teva is the seventh company to be charged by the DoJ for its participation in conspiracies to fix prices, rig bids, and allocate customers for generic drugs.
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