Two leading generic drug companies have reached settlements with the Department of Justice (DOJ) regarding charges of criminal price fixing. The U.S. division of Teva, based in Israel, will pay a $225 million criminal penalty over five years, while the U.S. division of Glenmark, based in India, will pay a $30 million criminal penalty. Both companies have entered into deferred prosecution agreements in which they admit to participating in antitrust conspiracies and pay penalties in exchange for avoiding charges.
As part of the settlements, both companies will divest from the production of pravastatin, a commonly used cholesterol medicine that reduces the risk of heart disease and stroke. Violation of the terms of the agreements will result in prosecution, and if convicted, the companies may be removed from federal health care programs.
In addition to the penalties, Teva has also committed to donating $50 million worth of two other drugs to humanitarian organizations that provide medication to Americans in need. Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division stated, “Today, the Antitrust Division and our law enforcement partners hold two more pharmaceutical companies accountable for raising prices of essential medicines and depriving Americans of affordable access to prescription drugs. Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism.”
Teva has admitted to participating in three antitrust conspiracies involving pravastatin, the antifungal medication clotrimazole, and tobramycin, an antibiotic used for various infections, including those in cystic fibrosis patients. Glenmark, on the other hand, admitted to participating in a conspiracy to fix the price of pravastatin.
Both companies emphasized their commitment to ethical practices and transparency. Teva attributed the scheme to a former employee who left the company in 2016, while Glenmark highlighted its dedication to compliance practices and operating at the highest ethical standards.
The DOJ’s investigation into generic drug companies began in 2014. As of now, five other companies have entered into deferred prosecution agreements and paid fines totaling nearly $430 million, according to the agency.
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