Teva under Fire from DOJ

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Teva Pharmaceuticals USA Inc. is in the crosshairs of the U.S. Department of Justice (DOJ) on two separate matters. On August 18, the DOJ announced that it filed a lawsuit against Teva and an affiliate, Teva Neuroscience Inc., under the False Claims Act for violations of the federal Anti-Kickback Statute. The suit alleges that the Teva entities funded two supposed charitable foundations, The Assistance Fund and Chronic Disease Fund, which then used Teva’s money to cover Medicare copays for patients taking Teva’s multiple sclerosis drug Copaxone. The suit covers the period from 2007 through 2015, during which time Teva raised the price of Copaxone from about $17,000 per year to over $73,000 per year.

Advanced Care Scripts Inc. (ACS), a specialty pharmacy to which Teva referred most of its Copaxone patients, previously agreed to a $3.5 million settlement with the DOJ to resolve allegations that it conspired with Teva in the scheme. ACS acknowledged that it had acted as a conduit to facilitate the exchange of patient information and the transfer of funds from Teva to the two foundations, which also reached settlements with the DOJ.

Then, on August 25, the DOJ charged Teva with conspiring with six other manufacturers in three separate conspiracies to fix prices, rig bids, and allocate customers for generic drugs. Five of the other companies involved in the antitrust cases have already agreed to settlements totaling $426 million, and the DOJ alleges that patients were overcharged more than $350 million.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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