Teva Pharmaceuticals Settles Kickback and Price-Fixing Allegations for $450 Million

Teva Pharmaceuticals agrees to pay $450 million to resolve allegations of violating the Anti-Kickback Statute and price-fixing,Photo byImage: Tysonomo Multimedia

Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. have agreed to pay $450 million to resolve allegations that they violated the Anti-Kickback Statute (AKS) and the False Claims Act (FCA), the Department of Justice (DOJ) announced today.

Teva USA, headquartered in Parsippany, New Jersey, is the largest generic drug manufacturer in the United States.

According to the department, the settlement addresses two separate alleged kickback schemes. The first involves allegations that from 2006 through 2017, Teva paid the copays of Medicare patients taking its multiple sclerosis drug Copaxone, while simultaneously raising the drug's price.

The DOJ alleges that Teva coordinated with a specialty pharmacy and two purportedly independent copay assistance foundations to funnel donations that specifically covered Copaxone copays, which the company knew was prohibited by the AKS.

This scheme allegedly caused the submission of false claims to Medicare, the department says.

In the second matter, Teva USA has agreed to resolve allegations that it conspired with other generic drug manufacturers to fix the prices of pravastatin—a medication widely used to treat high cholesterol and triglyceride levels—as well as clotrimazole and tobramycin.

The department states that the benefits Teva received from this price-fixing scheme constituted illegal kickbacks.

Teva USA previously entered into a deferred prosecution agreement with the DOJ's Antitrust Division to resolve related criminal charges.

Under that agreement, Teva USA paid a criminal penalty of $225 million and admitted to conspiring with three other generic drug companies to fix prices on certain medications.

The $450 million payment announced today is in addition to the criminal penalty paid under the deferred prosecution agreement.

“When a pharmaceutical company manipulates drug prices through collusion, or disguises kickbacks as charitable donations to subsidize copays for its own drugs," said Assistant Inspector General for Investigations Adam Globerman of the Department of Health and Human Services Office of Inspector General.

"The integrity of the Medicare program is jeopardized.”