Teva Pharmaceuticals Industries Ltd, a leading pharmaceutical company, has agreed to a significant $450 million settlement with the U.S. government to resolve allegations of illegal activities. These allegations center around violations of the Anti-Kickback Statute (AKS) and the False Claims Act (FCA), which aim to protect Medicare and ensure fair pricing of essential medications.
The settlement addresses two primary accusations:
Copay Scheme:
Teva is accused of engaging in a kickback scheme involving the multiple sclerosis drug Copaxone between 2006 and 2017. The company allegedly coordinated with third parties, including a specialty pharmacy and supposedly independent copay assistance foundations, to cover patients’ copays for Copaxone. Federal prosecutors contend that these actions violated the AKS, as Teva simultaneously raised the price of the drug. This manipulation of the charitable foundation process, according to Acting U.S. Attorney for the District of Massachusetts Joshua S. Levy, undermined Medicare’s copay system.Price-Fixing Scheme:
The second allegation accuses Teva USA of colluding with other generic drug manufacturers to fix the prices of pravastatin (a cholesterol-lowering drug), clotrimazole, and tobramycin, two additional generic medications. The Justice Department had previously secured a deferred prosecution agreement with Teva USA, where the company admitted to participating in price-fixing activities.This settlement is a part of a broader initiative by the U.S. government to crack down on price-fixing and kickbacks in the pharmaceutical industry. The Justice Department has been particularly active in pursuing these types of cases, securing over $1 billion in settlements from pharmaceutical companies and reaching agreements with several foundations and a specialty pharmacy involved in these practices.
The settlement comes at a time when the pharmaceutical industry is facing intense scrutiny over drug pricing and practices. This case highlights the government’s commitment to holding companies accountable for manipulating the healthcare system for profit. Teva’s stock price, as of Friday, was down 0.34% at $17.35.
