• by Thom Forbes , August 26, 2020

The U.S. Dept. of Justice filed charges in federal court in Philadelphia yesterday alleging that Teva Pharmaceuticals conspired to “fix prices, rig bids and allocate customers for generic drugs” from around May 2013 until about Dec. 2015. 

“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 states  in the news release announcing the action. 

The Israeli-based generic drug giant, which manufactures about 3,500 products, responded that an internal investigation lasting more than four years found no wrongdoing on it part. The company states  it “firmly rejects the allegations and will vigorously defend the company in court.”

“A person familiar with the matter said the indictment followed Teva’s refusal to agree to a settlement that would have required paying a criminal penalty and admitting wrongdoing,” Reuters’ Diane Bartz and Mrinalika Roy report.

“In the superseding indictment filed in the U.S. District Court for the Eastern District of Pennsylvania, Teva is charged with three counts of conspiring with companies that include Glenmark Pharmaceuticals, Apotex Corp., Taro Pharmaceutical Industries and Sandoz Inc.,” they add.

“Patients would have paid a total of $350 million more than they should have, the [Justice] department said. Five companies investigated in the case have already paid heavy fines to avoid prosecution,” according to an AFP story published  in The Times of Israel.

“Sandoz, a subsidiary of the Swiss pharmaceutical giant Novartis, agreed to pay $195 million in March, and the American subsidiary of the Israeli group Taro Pharmaceuticals agreed to pay $205.7 million in July,” it  continues.

“Teva, the world’s largest generic-drug maker by market value, is the most high-profile company to be charged in the Justice Department’s probe into allegations that companies conspired with one another to prop up the prices of certain widely used medications. Nine of every 10 prescription drugs dispensed in the U.S. are generics,” Bloomberg’s David McLaughlin writes  for Yahoo Finance.

“The Justice Department said Teva colluded with competitors to increase prices for medications that treat cholesterol, seizures, pain, skin conditions, blood clots, brain cancer, cystic fibrosis, arthritis and hypertension,” McLaughlin continues.

“Chief executive officer Kare Schultz said  in an interview earlier this month that Teva didn’t engage in price-fixing and that the company was prepared to fight any charges. Schultz said the company wouldn’t agree to an accord that could limit the company’s ability to sell products in the U.S.,” he adds.

“The case would mark a rare showdown in court. Because the stakes of a criminal conviction can be so dire, companies in the Justice Department’s crosshairs for price fixing rarely elect to go to trial, especially because prosecutors usually have other companies cooperating with their cases,” Brent Kendall and Jared S. Hopkins write  for The Wall Street Journal.

“Each of the charges carries a statutory maximum penalty of $100 million, but the maximum fine may be increased to twice the gain derived from the alleged crime or twice the loss suffered by victims. 

“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,” Kendall and Hopkins add.

“In July 2020, a Philadelphia judge ruled that Teva Pharmaceutical Industries Ltd. will be the first trial to advance in the multi-district litigation (MDL) regarding an alleged industry-wide conspiracy to fix generic prices. Meanwhile, trials involving schemes to fix the prices of three specific drugs (clobetasol, clomipramine, and pravastatin) will advance along a separate track. The MDL, which accuses top generic drug makers of working together to increase drug prices, has been consolidated in the United States District Court for the Eastern District of Pennsylvania,” Thomas Sullivan reported  for Policy & Medicine last week.

Teva, for its part, reminds us just how big it is.

“As we defend this matter, Teva will maintain focus on its critical role in the U.S. healthcare system, ensuring access to affordable medicines, including helping millions of patients who suffer multiple chronic conditions. One out of every 10 of the 3.69 billion generic prescriptions written in the United States each year is filled with a Teva product,” it states.