On Monday, Teva Pharmaceuticals And Glenmark Pharmaceuticals became the sixth and seventh drug manufacturer clear criminal charges as a result of the Department of Justice’s years-long investigation into generic drug price-fixing. The settlement agreement requires both companies to pay hefty fines and divest their pravastatin drug lines, a widely used statin used to lower cholesterol.
In 2019, the DOJ showed it was serious about fighting generic price-fixing by issuing two multimillion-dollar fines against Heritage Pharmaceuticals and Rising Pharmaceuticals. The legal case at the heart of Monday’s settlement dates back to 2020 when the DOJ charged Teva for alleged price fixing with four other generic drug makers – Glenmark, Sandoz, apotex And Taro Pharmaceuticals.
The indictment accused the pharmaceutical companies of raising prices, manipulating offers and allocating customers for generic drugs. These drugs included pravastatin, as well as generic drugs for autoimmune diseases, pain, cancer, and cystic fibrosis. In 2020, Taro, Sandoz, and Apotex admitted their role in the alleged machinations and paid fines totaling $205.7 million, $195 million, and $24.1 million, respectively. With Monday’s settlement, Teva and Glenmark also admitted their role in implementing a price-fixing plan and agreed to pay criminal penalties.
The DOJ ordered Teva to pay a $225 million penalty, which the department said was the largest penalty to date for “a domestic antitrust cartel.” As for Glenmark, the DOJ fined the company $30 million. The settlement agreement also requires that both Teva and Glenmark divest their respective drug lines for pravastatin, which was the focus of the companies’ alleged price fixing.
In addition to the $225 million fine, the Justice Department ordered Teva to donate $50 million worth of drugs to humanitarian organizations. These drugs are the antifungal clotrimazole and the antibiotic tobramycin. The prices of both were affected by the conspiracy, the DOJ said.
If either company violates the terms of its settlement agreement, it will be prosecuted. If convicted, they would likely be barred from government health programs like Medicare and Medicaid, according to the Justice Department.
“If a company is convicted of a criminal offense, it is barred from participating in US federal health programs. Teva Pharmaceuticals is one of the largest generic drug companies in the world, so excluding it from much of the healthcare industry would be dangerous. The right response is to downsize the company and force it to siphon off illicit profits, which the antitrust division has done,” said Matt Stoll, director of research at antitrust agency American Economic Liberties Project, in one opinion.
in one press release Teva said Monday that the company “encourages a culture of compliance” and “has strong and consistent compliance controls” in place to prevent price-fixing from happening again in the future. Glenmark didn’t answer MedCity News‘ Please comment.
In 2019, Heritage agreed to pay more than $7 million to settle his price-fixing case, and Rising was fined a total of more than $3 million. In all, seven drug companies have agreed to pay nearly $700 million as a result of the DOJ’s crackdown on generic price-fixing.
Photo: Gerenme, Getty Images
