Generic drug giants settle federal price-fixing charges

Two generic drug giants agreed Monday to settle long-running criminal price-fixing charges with the Justice Department, including the unusual move to sell off the drugs involved.

The U.S. arms of Israel-based Teva and India-based Glenmark are paying $225 million and $30 million, respectively, according to court filings. The companies agreed to enter into deferred prosecution agreements, a resolution in which charges are suspended but a company must admit wrongdoing. It can later face charges if it does not follow the terms of the deal.

Teva will also make a $50 million drug donation to humanitarian organizations.

The two companies both agreed to sell off their operations making the cholesterol drug pravastatin. Companies typically pay criminal fines to settle antitrust charges rather than selling off lines of business.

“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,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The resolutions include extraordinary remedial measures that require the breakup of assets and restore competition to the industry,”

Teva acknowledged fixing prices on pravastatin as well as clotrimazole, used for skin infections, and tobramycin, used to treat cystic fibrosis. Glenmark admitted to fixing prices of pravastatin.

In a statement, Teva said the conduct involved a single employee between 2013 and 2015 and the company is pleased to resolve the case.

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

The settlements resolve a long-running criminal probe of the generic pharmaceutical industry dating to 2014. Five other companies, including Novartis-owned Sandoz, have entered into deferred prosecution agreements and paid $426 million in criminal fines.

A senior sales executive from Taro Pharmaceuticals is fighting price-fixing charges stemming from the same investigation.

Glenmark was indicted in July 2020 in Philadelphia federal court, with Teva added to the indictment the following month. Teva, Glenmark and Apotex, which agreed to a criminal fine of $24 million, were charged with conspiring to fix prices of pravastatin.

Other charges against Teva included conspiring with Taro (which previously paid a $205.6 million fine) to fix prices of drugs including treatments for seizures and bipolar disorder, arthritis, eczema and blood clots; and conspiring with Sandoz (which paid $195 million) to fix prices on treatments for arthritis, high blood pressure, brain cancer and cystic fibrosis.

While Teva was the last and largest of the generic drugmakers to face charges, myriad companies face civil claims in a variety of class-action lawsuits and cases brought by nearly every state attorney general in the country.