DOJ settles price-fixing charges against generic drug giants

Two major generic drug companies Monday settled charges of criminal price fixing with the Department of Justice (DOJ).

The U.S. division of Israel-based Teva will pay a $225 million criminal penalty over five years, and the U.S. division of India-based Glenmark will pay a $30 million criminal penalty, the DOJ announced.

The two companies entered into a deferred prosecution agreement, in which they admitted to participating in antitrust conspiracies and paid penalties in exchange for not being charged. 

The DOJ said both companies will also divest from making pravastatin, a widely used cholesterol medicine that lowers the risk of heart disease and stroke.

Both companies will face prosecution if they violate the terms of the agreements, and if convicted, they would likely face mandatory removal from federal health care programs.

Teva must also donate $50 million worth of two additional drugs to humanitarian organizations that provide medication to Americans in need. 

“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,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in a statement. “Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism.”

As part of the agreements, Teva admitted to participating in three antitrust conspiracies that affected pravastatin, the antifungal medication clotrimazole, and tobramycin, an antibiotic used to treat a variety of infections, including lung infections in cystic fibrosis patients.

Glenmark admitted to participating in a conspiracy to fix the price of pravastatin.

“Glenmark is committed to being a socially and ethically responsible company. We have devoted considerable resources to strengthen our compliance practices, ensuring the highest ethical operating standards. We will continue to conduct our business with the utmost transparency and integrity,” Sanjeev Krishan, president of Glenmark’s U.S. division said in a statement. 

In a statement, Teva said that a single former employee who left the company in 2016 was responsible for the scheme in three separate instances between 2013 and 2015.

In an unsigned statement, Teva said it was “pleased to put these charges behind us and believe that we remain well-positioned to defend against related civil claims.”

The DOJ has been conducting a probe of generic drug companies since 2014. Five other companies have entered into deferred prosecution agreements and paid nearly $430 million in fines, the agency said.