Teva Pharmaceutical's U.S. Unit Indicted on Price-Fixing Charges -- 2nd Update
By Brent Kendall and Jared S. Hopkins
WASHINGTON -- The U.S. business of Teva Pharmaceutical
Industries Ltd. was indicted Tuesday on charges the generic
drugmaker fixed prices on cholesterol medication and other
The Justice Department's antitrust division brought the case in
a Pennsylvania federal court, alleging Teva Pharmaceuticals USA
engaged in anticompetitive conduct that resulted in at least $350
million in overcharges to consumers.
Prosecutors accused the company of fixing prices, rigging bids
and allocating customers in three different conspiracies, including
for pravastatin, a commonly prescribed cholesterol drug. A second
conspiracy involved price fixing on medications used to treat
arthritis, seizures, pain, skin conditions, and blood clots, the
Justice Department alleged. The third alleged conspiracy involved
drugs used to treat brain cancer, cystic fibrosis, arthritis, and
hypertension, the department said.
Teva participated in the conspiracies from May 2013 until at
least December 2015, prosecutors alleged.
"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," Assistant Attorney General Makan
Delrahim, the Justice Department's top antitrust official, said in
A Teva spokeswoman declined to comment.
The indictment is the highest-profile action in a long-running
investigation that has swept across the generic-drug industry and
has resulted in cases against seven companies and four executives
Most companies so far have agreed to settle charges by paying
criminal penalties, admitting wrongdoing and agreeing to cooperate,
in exchange for deferred prosecution agreements in which the
government would drop the cases eventually, so long as the
defendant companies fulfilled their obligations under the
Among those that reached such deals were Novartis AG's Sandoz
subsidiary, which in March agreed to pay a $195 million criminal
penalty, and Taro Pharmaceuticals Inc., which agreed last month to
pay $205.7 million.
Teva had met with top DOJ brass to try to persuade them not to
bring a case, and it was resistant to a settlement that would have
included a deferred prosecution agreement and a requirement that
the company admit wrongdoing, according to the person familiar with
Teva, which had nearly $17 billion in sales last year, is among
the largest pharmaceutical companies by revenue globally. The
company has been challenged in recent years by the collapse of
generic drug prices and a heavy debt load, seeing shares fall more
than 80% since 2015. New management initiated a restructuring.
In addition to financial penalties, a felony conviction of Teva
could lead to its exclusion from federal health-care programs.
The charges are the latest headache for Teva, which also is
facing price-fixing lawsuits from state attorneys general and
private plaintiffs, including health insurers.
A coalition of states have filed three sweeping lawsuits related
to drug price-fixing since 2016 against a host of companies
including Teva. The most recent, filed in June, involves alleged
price-fixing of more than 80 prescription drugs including skin
Teva has disputed the allegations.
The company's U.S. unit also was hit with a separate civil
lawsuit from the Justice Department earlier this month alleging it
engaged in a scheme to game the Medicare system and prop up high
prices for its multiple sclerosis drug Copaxone. Teva denied the
Teva is also among drug manufacturers facing thousands of
lawsuits brought by states, cities and counties accusing it of
helping spark the nation's opioid crisis. Last year Teva agreed to
a global settlement framework with several state attorneys general
to resolve the claims, but so far nothing final has been
Chief Executive Kare Schultz said in an interview earlier this
month he had hoped a deal would go through earlier this year, and
that talks are continuing.
Write to Brent Kendall at firstname.lastname@example.org and Jared S.
Hopkins at email@example.com
(END) Dow Jones Newswires
August 25, 2020 19:42 ET (23:42 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.