Teva Pharmaceutical to Pay $225 Million in Fines for Price Fixing

Teva Pharmaceutical, the world's largest generic drugmaker, has agreed to pay a fine of $225 million as part of a settlement with the U.S. Department of Justice (DOJ) over price-fixing charges. The settlement also includes the divestiture of its copycat version of a cholesterol drug as well as other terms aimed at resolving the allegations.

The charges against Teva stem from allegations of conspiring to fix prices of generic drugs, a practice that undermines fair market competition and has potential negative impacts on consumers. Prosecutors initially brought these charges against Teva and India's Glenmark Pharmaceuticals in 2020.

As per the settlement terms, Teva will pay the fine over a span of five years, with $22.5 million due annually from 2024 through 2027, and a final payment of $135 million due in 2028. Glenmark Pharmaceuticals, implicated in similar charges, will also pay a penalty of $30 million to resolve the allegations.

In addition to the fines, both Teva and Glenmark are required to divest their respective versions of a generic cholesterol drug, pravastatin. This drug played a central role in the price-fixing conspiracy attributed to the companies.

The Department of Justice underlines that the settlements come with strict terms. If either Teva or Glenmark violates the terms of the agreements, they could face prosecution. Conviction under these circumstances would likely lead to mandatory debarment from federal health care programs.

Teva has also agreed to make a positive contribution as part of its settlement. The company will donate generic products worth $50 million to humanitarian organizations, further demonstrating its commitment to addressing the impact of its actions.

The settlements are accompanied by admissions from both companies regarding their involvement in fixing the price of pravastatin. Teva went a step further by admitting to the participation of a former employee, who left the company in 2016, in two additional price-fixing schemes that occurred between 2013 and 2015, apart from the pravastatin case.

These price-fixing practices have implications for critical medicines, including pravastatin, clotrimazole used for skin infection treatment, and tobramycin, a medicine prescribed for eye infections. The resolution of these charges marks a significant step towards ensuring fair competition and safeguarding consumer interests in the pharmaceutical industry.