Teva Pharma To Pay $450 Mln To Settle Kickback Allegations

Teva Pharmaceutical Industries

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(RTTNews) - Teva Pharmaceuticals (TEVA) has agreed to pay $450 million in a settlement under the False Claims Act to resolve allegations related to kickbacks concerning copayments and price fixing, the U.S. Department of Justice said in a statement.

The Justice Department said that the settlement encompasses two alleged kickback schemes. First, Teva has agreed to resolve allegations in a complaint the United States filed in the District of Massachusetts in August 2020 that Teva violated and conspired to violate the Anti-Kickback Statute and the False Claims Act by paying Medicare patients' cost sharing obligations (copays) for the multiple sclerosis drug Copaxone from 2006 through 2017, while steadily raising Copaxone's price.

In particular, the United States alleged that Teva coordinated and conspired with multiple third parties, including a specialty pharmacy and two allegedly independent copay assistance foundations, to ensure that purported donations to the foundations were used specifically to cover the copays of Medicare Copaxone patients, which Teva knew was prohibited by the Anti-Kickback Statute, and that Teva thereby caused the submission of false claims to Medicare.

Second, Teva USA has agreed to resolve separate allegations that it conspired with other generic drug manufacturers to fix prices for pravastatin, a drug widely used to treat high cholesterol and triglyceride levels, as well as two other generic drugs, clotrimazole and tobramycin.

Teva USA previously entered into a deferred prosecution agreement with the Justice Department's Antitrust Division to resolve related criminal charges. Teva USA paid a criminal penalty of $225 million and admitted to conspiring with three other generic drug companies to fix prices on certain generic drugs. Under the civil settlement announced today, Teva agreed to resolve allegations that the benefits it received under its price fixing scheme constituted illegal kickbacks.

Teva will pay collectively $450 million to resolve the two kickback schemes. This payment is in addition to the criminal penalty paid by Teva USA under its deferred prosecution agreement.