U.S. Justice Department Charges Teva in Generic Drugs Price-fixing Probe

The pharmaceutical giant is charged with conspiring with competitors to raise prices, could face $100 million fine

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The Jerusalem plant of Teva Pharmaceutical Industries, December 17, 2017.
The Jerusalem plant of Teva Pharmaceutical Industries, December 17, 2017.Credit: MENAHEM KAHANA / AFP

The U.S. Justice Department charged Teva Pharmaceuticals Industries Tuesday with conspiring with competitors to raise prices for generic drugs.

The Justice Department has been investigating allegations the company violated antitrust law by colluding with other drugmakers to push up the prices of widely used pharmaceuticals, including a generic version of the cholesterol-reducing drug Pravachol.

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The criminal charges were filed against the company in a Pennsylvania court early Wednesday morning Israel time. Customers were overcharged by $350 million as a result, the charges state.

“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 said in a statement.

Teva said in a statement that “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.

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, Taro Pharmaceutical Industries and Sandoz, the statement said. This allegedly happened between May 2013 and December 2015.

According to the first charge, Teva, Glenmark and Apotex agreed to increase prices for the cholesterol-lowering drug pravastatin and other generic drugs. In the second charge, Teva and Taro are accused of agreeing to increase prices, rig bids and allocate customers for drugs to treat arthritis, seizures, pain, skin conditions and blood clots.

In the third charge, Teva and Sandoz are accused of a conspiracy involving drugs used to treat brain cancer, cystic fibrosis, arthritis and high blood pressure.

Apotex, Taro and Sandoz have previously admitted their roles in the conspiracies and agreed to pay penalties, the Justice Department said. The maximum penalty in such cases is $100 million.

However, Teva may wind up paying a higher fine because it failed to reach an agreement with the Justice Department.

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