Teva Pays $450M To Resolve Alleged Kickback, Price-Fixing Schemes

Teva Pharmaceuticals Industries Ltd TEVA has agreed to a $450 million settlement with the U.S. government to resolve allegations that they violated the Anti-Kickback Statute (AKS) and the False Claims Act (FCA).

The settlement stems from claims that Teva engaged in two unlawful kickback schemes, impacting Medicare and the pricing of essential drugs.

Also Read: Eli Lilly Fights $183M Medicaid Fraud Judgment, Cites Reasonable Interpretation Of Medicaid Rules.

This resolution includes $225 million in criminal penalties that Teva USA previously paid as part of a deferred prosecution agreement with the Department of Justice.

The first kickback scheme involved allegations that Teva violated the AKS by covering Medicare patients’ copays for the multiple sclerosis drug Copaxone between 2006 and 2017.

During this period, Teva is accused of coordinating with third parties, including a specialty pharmacy and two supposedly independent copay assistance foundations, to direct donations to cover patients’ Copaxone copays.

According to federal prosecutors, these actions were prohibited by the AKS and caused false claims to be submitted to Medicare as Teva simultaneously raised the drug’s price.

The second scheme alleges that Teva USA conspired with other generic drug manufacturers to fix the prices of pravastatin, a cholesterol-lowering drug, clotrimazole, and tobramycin, two additional generics.

The Justice Department had previously secured a deferred prosecution agreement with Teva USA, where the company admitted to participating in price-fixing activities.

The settlement is part of a broader initiative against price-fixing and kickbacks in the pharmaceutical industry.

According to Joshua S. Levy, Acting U.S. Attorney for the District of Massachusetts, Teva’s manipulation of the charitable foundation process violated the AKS and undermined Medicare’s copay system. His office has played a central role in these enforcement actions, returning over $1 billion to Medicare since 2017.

This settlement is the largest among a series of cases targeting pharmaceutical companies that unlawfully paid patient copays through third-party foundations.

The Justice Department has secured over $1 billion from these companies and reached settlements with four foundations and a specialty pharmacy.

Price Action: TEVA stock is down 0.34% at $17.35 at last check Friday.

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