Teva Posed to Face Charges in Drug Price-Fixing Probe

Teva Pharmaceuticals, one of the world’s largest makers of generic drugs, may soon be indicted by the U.S. Department of Justice. This most recent investigation by the DOJ focused on Teva and other drug companies conspiring to fix prices on several widely used generic medications.

Teva Posed to Face Charges in Drug Price-Fixing Probe

TEVA logo

By David McLaughlin
August 25, 2020

DOJ preparing criminal antitrust complaint against drug-maker

U.S. prosecutors are preparing to charge Teva Pharmaceutical Industries Ltd. with conspiring with competitors to raise prices for generic drugs, according to a person familiar with the matter.

The Justice Department is planning to charge Teva as soon as Tuesday after the company rebuffed a settlement that would have required paying a criminal penalty and admitting wrongdoing, said the person, who declined to be named because the matter is confidential.

Teva’s U.S.-traded shares fell as much as 6% on the news and were down 2.3% to $9.41 at 3:25 p.m. in New York. A spokesperson for the company, which is based in Israel, declined to comment.

Charges against Teva, the world’s largest generic-drug maker by market value, would mark the most significant case to come out of the Justice Department’s years-long investigation into allegations that companies conspired with one another to prop up the prices of certain widely used medications. Nine of every 10 prescription drugs dispensed in the U.S. are generics.

Five other companies have settled charges and agreed to pay a total of $426 million in criminal penalties.

Chief Executive Officer Kare Schultz said in an interview earlier this month that Teva didn’t engage in price-fixing and that the company was prepared to fight any charges. Schultz said the company wouldn’t agree to an accord that could limit the company’s ability to sell products in the U.S.

The Justice Department’s antitrust division, which is conducting the investigation, has offered Teva a settlement known as a deferred prosecution agreement, according to a person familiar with the matter. Such resolutions suspend charges but require a company to admit wrongdoing and cooperate in the investigation.

Teva told the government it would only accept a non-prosecution agreement that doesn’t require the drug-maker to admit wrongdoing, the person said.

Admitting to wrongdoing would expose Teva to a potentially costly settlement in pending civil litigation against the company tied to the price-fixing allegations. Investors have long aired their concerns about Teva’s mounting legal exposure in both the generic price-fixing probes, as well as separate suits alleging the company played a major role in the opioid epidemic.

Teva is strapped for cash as it attempts to reduce its more than $26 billion debt load. In October, the company offered to settle thousands of opioid lawsuits in the U.S. through a $250 million payment along with a donation of drugs valued at $23 billion. Experts have said a settlement is still years away, and that the offering of a drug donation is a means for the company to avoid a hefty cash payment.

Schultz told investors earlier this month that Teva’s liabilities remain difficult to model, though Teva will do its best to avoid “insurmountable financial damage.”

In addition to the U.S. case, Teva and other generic-drug makers are grappling with civil lawsuits from a nationwide group of state attorneys general that accuse the companies of colluding to rig prices of drug and allocate customers. One of the lawsuits portrays Teva as masterminding a conspiracy with competitors that led to inflated prices on more than 100 different drugs.

— With assistance by Riley Griffin 

The information provided on this site is in no way intended to be a substitute for medical advice,
diagnosis, or treatment with a licensed physician.
The Allergy Advocacy Association is a 501(c)(3) non-profit, tax-exempt organization.
Copyright 2020 © Allergy Advocacy Association, Inc. All rights reserved.  Terms & Conditions