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Feds indict another generic drug company on price-fixing charges

Teva Pharmaceuticals’ U.S. unit is the seventh company accused of inflating prices

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Photo (c) Bill Oxford - Getty Images
The U.S. government has secured an indictment against Teva Pharmaceuticals’ U.S. unit on price-fixing charges.

The generic drugmaker was charged under a Justice Department complaint filed in federal court in Pennsylvania, accusing it of engaging in anticompetitive actions that resulted in consumers paying $350 million more than they should for prescription medications.

Specifically, the complaint accuses Teva of dividing up customers in three different conspiracies and fixing prices for pravastatin, a prescription cholesterol drug marketed under the brand name Pravachol.

The suit also charges Teva with conspiring to fix prices on several drugs prescribed to treat arthritis, seizures, pain, skin conditions, and blood clots. The company also stands accused of conspiring to fix prices for drugs used to treat brain cancer, cystic fibrosis, arthritis, and hypertension.

“Today’s charge reaffirms that no company is too big to be prosecuted for its role in conspiracies that led to substantially higher prices for generic drugs relied on by millions of Americans,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The division will continue to work closely with our law enforcement partners to ensure that companies that blatantly cheat consumers of the benefits of free markets are prosecuted to the full extent of the law.”

Teva will fight the charges in court

Teva issued a statement in response to the indictment in which it disputed the allegations and said it would defend itself against the charges in court. It also said it is “deeply disappointed that the government has chosen to proceed with this prosecution.” 

Teva Pharmaceuticals is the seventh drug company to be indicted in the Justice Department’s ongoing probe of alleged price-fixing in the generic drug market. In January, a group of states filed sweeping generic drug price-fixing charges against 26 corporate and 10 individual defendants. That complaint charged the defendants with attempting to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for generic drugs.

The Justice Department indictment accuses Teva of conspiring with three other pharmaceutical companies -- Tarco Pharmaceuticals, Taro Pharmaceuticals, and Sandoz, Inc. The Justice Department says Sandoz admitted to its role in this conspiracy, as well as to conspiracies with other generic drug manufacturers. In March, the company agreed to pay a $195 million penalty.  

“During these difficult times, it is absolutely essential that our pharmaceutical companies conduct business with the well-being of the consumer in mind,” said Acting Special Agent in Charge Steven Stuller, U.S. Postal Service Office of Inspector General. “When generic drug companies conspire to artificially increase prices, they do so to the detriment of many who depend on these medications to maintain good health.”

Five previous drug price-fixing cases were resolved by deferred prosecution agreements. The Justice Department said Glenmark Pharmaceuticals is awaiting trial. Four executives have also been charged; three have entered guilty pleas, and one is awaiting trial.

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