USA — Teva Pharmaceuticals has agreed to a landmark settlement, involving a staggering US$225 million in criminal fines spread over five years, as part of the resolution of charges brought against them for price-fixing practices.
This announcement, along with the parallel revelation that Glenmark Pharmaceuticals will pay US$30 million for similar allegations, has sent shockwaves through the industry.
The United States Department of Justice (DOJ) laid out these unprecedented settlements on Monday, marking a significant milestone in the battle against antitrust violations within the pharmaceutical sector.
At the core of these agreements lies a pivotal stipulation: both Teva and Glenmark are obliged to initiate comprehensive remedial actions.
One of the most remarkable mandates is the timely divestiture of their respective drug portfolios, a move aimed at dismantling their monopolistic hold on key medications.
Pravastatin, a widely used cholesterol medication, takes center stage in this settlement. It is revealed that both companies were ensnared in a web of price-fixing conspiracy involving this crucial drug.
Glenmark Pharmaceuticals has taken a momentous step by admitting its involvement in the manipulation of pravastatin prices.
On the other hand, Teva Pharmaceuticals found itself entangled in three distinct antitrust schemes, all with far-reaching implications.
Their participation encompassed not only pravastatin but also two other vital products: clotrimazole, a treatment for skin infections, and tobramycin, a medicine crucial for cystic fibrosis patients.
The legal proceedings unfolded in a series of counts that meticulously dissected the extent of the pharmaceutical giants’ collusion.
In the first count, Teva, in tandem with Glenmark, Apotex, and other players, was accused of orchestrating price hikes not only for pravastatin but also for various other generic drugs.
Apotex, one of the involved parties, has already acknowledged its role and settled with a substantial US$24.1-million penalty in mid-2020.
The second count spotlighted Teva’s intricate involvement in a conspiracy entailing Taro Pharmaceuticals and additional collaborators.
Their sinister machinations encompassed inflating prices, manipulating bids, and segmenting customers for generic drugs, including clotrimazole. Taro Pharmaceuticals eventually admitted culpability and consented to a hefty penalty of US$205.7 million.
In the third count, Teva faced charges for its complicity with Novartis’ Sandoz unit and other co-conspirators.
The objective remained consistent: elevate prices, rig bids, and allocate clients for generic medications, tobramycin in this instance.
Sandoz had already confessed to its involvement and resolved its share of responsibility by paying a substantial US$195 million penalty in 2020.
Teva, in its defense, cited a deferred prosecution agreement (DPA) it inked with the DOJ. This landmark pact is set to shield the company from exclusion from US federal healthcare programs.
Teva attributed its entanglement in the conspiracy to a single former employee who, between 2013 and 2015, collaborated with competitors to suppress bids on specific generic products destined for certain customers. Crucially, this employee had left Teva’s ranks in 2016.
Teva maintained that it possesses robust compliance mechanisms designed to thwart any recurrence of such activities.
A noteworthy commitment was recently manifested as the company earmarked US$200 million to potentially settle with the DOJ over these unsettling price-fixing allegations.
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