On Monday, Teva Pharmaceuticals and Glenmark Pharmaceuticals became the sixth and seventh drugmakers to resolve criminal charges as a result of the Department of Justice’s yearslong investigation into generic drug price fixing. The settlement agreement requires both companies to pay hefty fines as well as divest their drug lines for pravastatin, a widely used statin that lowers cholesterol.
In 2019, the DOJ showed that it was serious about cracking down on generic drug price fixing by issuing two multi-million dollar fines to Heritage Pharmaceuticals and Rising Pharmaceuticals. The legal case at the center of Monday’s settlement dates back to 2020, when the DOJ indicted Teva over alleged price fixing conspiracies with four other generic drugmakers — Glenmark, Sandoz, Apotex and Taro Pharmaceuticals.
The indictment charged the pharma companies with raising prices, rigging bids and allocating customers for generic drugs. These medications included pravastatin, as well as generic drugs for autoimmune diseases, pain, cancer and cystic fibrosis. In 2020, Taro, Sandoz and Apotex admitted their roles in the alleged schemes and paid fines respectively totaling $205.7 million, $195 million and $24.1 million. With Monday’s settlement, Teva and Glenmark have also admitted to their roles in running a price fixing scheme and agreed to pay criminal penalties.
The DOJ ordered Teva to pay a $225 million penalty, which the department said is the largest fine to date for “a domestic antitrust cartel.” As for Glenmark, the DOJ issued the firm a $30 million fine. The settlement agreement also requires both Teva and Glenmark to divest their respective drug lines for pravastatin, which was at the center of the companies’ alleged price fixing scheme.
In addition to the $225 million penalty, the DOJ ordered Teva to donate $50 million worth of drugs to humanitarian organizations. Those drugs are antifungal medication clotrimazole and antibiotic drug tobramycin The prices of both were affected by the conspiracy, the DOJ said.
If either company violates the terms of their settlement agreement, they will face prosecution. If convicted, they would likely get banned from federal healthcare programs like Medicare and Medicaid, according to the DOJ’s statement.
“When a firm is criminally convicted, it is barred from participating in U.S. federal healthcare programs. Teva Pharmaceuticals is one of the largest generic pharmaceutical firms in the world, so barring it from much of the healthcare industry would be dangerous. The right response is to shrink the firm and force it to disgorge illicit profits, which is what the antitrust division did,” Matt Stoller, director of research at the antitrust advocacy group American Economic Liberties Project, said in a statement.
In a press release issued Monday, Teva said it “fosters a culture of compliance” and “has robust and consistent compliance controls in place” to prevent price fixing schemes from recurring in the future. Glenmark did not respond to MedCity News’ request for comment.
In 2019, Heritage agreed to pay more than $7 million to settle its price fixing case, and Rising was issued a penalty totaling more than $3 million. Collectively, seven drugmakers have agreed to pay nearly $700 million as a result of the DOJ’s crackdown on generic drug price fixing.