FX.co ★ Teva Pharma To Pay $450 Mln To Settle Kickback Allegations

Teva Pharmaceuticals (TEVA) has reached a settlement agreement to pay $450 million for allegations concerning kickbacks and price fixing, according to a statement by the U.S. Department of Justice. This settlement pertains to two alleged kickback schemes under the False Claims Act.

The first scheme involves allegations that Teva violated and conspired to violate the Anti-Kickback Statute and the False Claims Act by covering Medicare patients’ copayment responsibilities for its multiple sclerosis medication, Copaxone, from 2006 to 2017, all while incrementally increasing the drug's price. The United States asserts that Teva collaborated with various third parties, including a specialty pharmacy and two purportedly independent copay assistance foundations, ensuring that donations made to these foundations were used to cover Medicare Copaxone patients’ copays—a practice prohibited by the Anti-Kickback Statute—which in turn led to false claims being submitted to Medicare.

The second scheme addresses claims that Teva USA colluded with other generic drug manufacturers to fix prices for pravastatin, a medication commonly used to manage high cholesterol and triglyceride levels, along with two other generic drugs, clotrimazole and tobramycin.

Previously, Teva USA entered into a deferred prosecution agreement with the Justice Department’s Antitrust Division regarding related criminal charges. It paid a $225 million criminal penalty and admitted to conspiring with three other generic drug companies to fix prices on certain generics. Under today's civil settlement, Teva has agreed to resolve allegations that the advantages it gained from its price-fixing scheme were illegal kickbacks.

In conclusion, Teva will pay a total of $450 million to address the two kickback schemes, on top of the criminal penalty already settled in the deferred prosecution agreement with Teva USA.