Teva to pay $225 million in fines and divest generic drug to resolve price-fixing charges

Drugmaker Teva Pharmaceuticals agreed to pay $225 million in criminal fines to resolve charges related to price fixing three medications, including a generic cholesterol drug that it has agreed to divest, the U.S. Department of Justice announced Monday.

Glenmark Pharmaceuticals will pay $30 million to resolve charges alleging that it conspired with Teva to fix prices for that cholesterol drug, called pravastatin. Glenmark will also divest its version of that drug.

Teva’s fine is the largest to date for a domestic antitrust case. Both settlements are the latest resolution in a string of cases related to price fixing, which refers to competitors banding together to artificially set the price of a product. 

Since 2020, the DOJ’s antitrust division has charged five other pharmaceutical companies for participating in similar schemes affecting several generic drugs. Monday’s agreement means seven companies have resolved their criminal charges and collectively agreed to pay more than $681 million in criminal penalties. 

“Today, the Antitrust Division and our law enforcement partners hold two more pharmaceutical companies accountable for raising prices of essential medicines and depriving Americans of affordable access to prescription drugs,” Jonathan Kanter, assistant attorney general of the DOJ’s antitrust division, said in a release. 

The deals are deferred prosecution agreements, which means the two companies will not face trial or criminal punishment in the case if they abide by the terms of the agreements. If Teva and Glenmark are convicted, they will likely face mandatory debarment from federal health-care programs, according to the DOJ. 

Teva has also agreed to donate $50 million worth of two generic drugs affected by price fixing to humanitarian organizations that provide medications to Americans in need. The company said during an earnings call earlier this month that it has set aside $200 million to resolve the DOJ’s price-fixing allegations. 

Teva, in a press release Monday, said it will pay $22.5 million each year between 2024 and 2027, and $135 million in 2028. 

“Teva has robust and consistent compliance controls in place designed to prevent this type of activity from reoccurring, and has committed, as part of the [deferred prosecution agreement], to maintain those controls going forward,” the company said, adding it is “pleased to put these charges behind us.”

Glenmark, in a statement, said it is “committed to being a socially and ethically responsible company and has devoted considerable resources to strengthen our compliance practices, ensuring the highest ethical operating standards.

As part of Monday’s agreements, Glenmark admitted to participating in a scheme to fix the price of pravastatin. Meanwhile, Teva admitted to participating in three price-fixing schemes that affected pravastatin and two other drugs: skin infection treatment clotrimazole and tobramycin, a medication commonly prescribed to treat eye infections. 

The DOJ in June 2020 charged Glenmark with one count of price fixing in a filing in the Eastern District of Pennsylvania. That complaint alleged that Glenmark and other companies raked in $200 million from the illegal scheme.

In August, a grand jury in the Eastern District of Pennsylvania returned a superseding indictment against Glenmark and Teva for the same conduct and similar actions. 

One count alleged that Teva conspired with Glenmark, another company called Apotex Corp. and others to increase prices of pravastatin and other generic drugs. Apotex admitted to its role in the scheme and agreed to pay a $24.1 million penalty in May 2020.

Another count alleged that Teva conspired with Taro Pharmaceuticals U.S.A. and its former executive Ara Aprahamian, among other parties, to price fix clotrimazole and other generic drugs. Taro admitted to its role in the conspiracy and agreed to pay a $205.7 million penalty in July 2020. Aprahamian was indicted in February 2020 and is awaiting trial.

A third count alleged Teva conspired with Sandoz and other companies to price fix tobramycin and other generic medicines. A former Sandoz executive pleaded guilty for his participation in the conspiracy in February 2020. Sandoz admitted to its role in the conspiracy and agreed to pay a $195 million penalty in March 2020.