Teva Pharmaceuticals agrees to pay $450m to settle kickback allegations

Teva Pharmaceuticals has agreed to pay $450m to settle allegations that it violated several government acts and a raft of kickback allegations.

On two serious occasions, it was alleged that Teva Pharmaceuticals breached the Anti-Kickback Statute (AKS) and the False Claims Act (FCA). The New Jersey company is the largest generic drug manufacturer in the United States and a trusted name in the pharmaceutical world.

“For far too long, Teva gamed the charitable foundation process by paying kickbacks through two foundations, and with the aid of a specialty pharmacy. Those kickbacks undermined the purpose of the Medicare co-pay system and violated the Anti-Kickback Statute,” said Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts.

Teva Pharmaceuticals agrees $450m resolution fee

It was alleged through a complaint made by the United States filed in the District of Massachusetts in August 2020 that the company breached and conspired to violate the AKS and FCA by “paying Medicare patients’ cost-sharing obligations (copays) for the multiple sclerosis drug Copaxone from 2006 through 2017, while steadily raising Copaxone’s price.“

The complaint further investigated that Teva worked with third parties, including a “specialty pharmacy and two allegedly independent copay assistance foundations.” Teva breached the AKS scheme by attributing Medicare Copaxone patient’s care payments to the foundations and submitting false claims to Medicare.

Secondly, and importantly to the resolution’s narrative, Teva acknowledged the allegations that it knowingly fixed the price of certain drugs, like Pravastatin. Pharmacies and medical institutions use this drug, which is widely used to treat high cholesterol and triglyceride levels. Teva also acknowledged the allegations that it conspired with other drug manufacturers to fix the price of two other generic drugs, clotrimazole and tobramycin.

The Justice Department’s Antitrust Division previously investigated the criminal allegations of this price-fixing scheme. This resulted in a criminal penalty of $225 million, and Teva admitted to conspiring with three other generic drug companies to fix prices on certain generic drugs.

The Justice Department’s announcement on the copay matter was part of a coordinated effort by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Massachusetts, with investigative support from the Health and Human Services Office of Inspector General (HHS-OIG) and the FBI.

The Fraud Section and the U.S. Attorney’s Office for the Eastern District of Pennsylvania achieved the civil resolution with investigative support from HHS-OIG, the Defense Health Agency Program Integrity Office, DCIS, and the Office of Inspector General for the Department of Veterans Affairs.

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