Big Pharma Price-Fixing: Teva and Glenmark's $255M Settlement Shines Light on Industry Issues

Drugmaker Teva Pharmaceutical Industries Limited TEVA has agreed to pay $225 million in criminal fines to settle charges related to price fixing of three medications, including a generic cholesterol drug, pravastatin.

The U.S. Department of Justice announced the settlement on Monday. This fine is the largest ever for a domestic antitrust case.

Glenmark Pharmaceuticals, which allegedly conspired with Teva in fixing prices for the cholesterol drug pravastatin, will also pay $30 million to resolve the charges. 

As part of the settlement, both companies will divest their versions of pravastatin.

These settlements come amidst a string of cases related to price fixing in the pharmaceutical industry. Since 2020, the DOJ's antitrust division has charged several pharmaceutical companies for participating in schemes that artificially set the prices of generic drugs. 

Monday's agreements bring the total number of resolved criminal charges to seven companies, collectively agreeing to pay over $681 million in criminal penalties.

The settlements are structured as deferred prosecution agreements, meaning that Teva and Glenmark will avoid trial or criminal punishment if they comply with the terms outlined in the agreements. 

However, if convicted, they could face mandatory debarment from federal healthcare programs.

Teva has also committed to donating $50 million worth of two generic drugs affected by price fixing to humanitarian organizations providing medications to those in need. 

Glenmark admitted to participating in a price-fixing scheme for pravastatin, while Teva admitted to being involved in three price-fixing schemes that affected pravastatin, clotrimazole (a skin infection treatment), and tobramycin (a medication for eye infections).

The DOJ's focus on price fixing has resulted in significant fines and penalties for multiple pharmaceutical companies, highlighting ongoing concerns in the industry. 

As these cases unfold, they shed light on the need for increased accountability and transparency within the pharmaceutical sector.

Price Action: TEVA shares are up 1.66% at $9.77 on the last check Tuesday.