Teva and Glenmark Pharmaceuticals, implicated in a price-fixing scheme, are facing substantial penalties and divestiture mandates after reaching a deferred prosecution agreement (DPA) with the US Department of Justice (DOJ). The agreement entails charges against the companies that will be dropped upon their compliance with specific conditions.
The stakes are high, as a conviction could lead to exclusion from vital federal healthcare programs like Medicare and Medicaid. Teva, to avert such repercussions, will pay a $225 million fine spread over five years—the largest domestic antitrust cartel penalty recorded by the DOJ.
Glenmark, in turn, is required to pay a $30 million fine.
Beyond the financial consequences, Teva is obliged to donate generic versions of antifungal cream clotrimazole and antibiotic tobramycin worth $50 million to humanitarian organizations. Additionally, Teva must divest its generic cholesterol medication pravastatin to a third-party buyer—a measure characterized by the government as an “extraordinary remedy.” Glenmark is also compelled to divest its own version of pravastatin.
In its confession within the DPA, Teva admitted that a former employee collaborated with competitors to refrain from bidding on contracts for specific drugs between 2013 and 2015. The illicit agreement impacted the markets for clotrimazole, tobramycin, and pravastatin. The implicated employee left Teva in 2016.
Glenmark’s involvement was marked by its admission to participating in a conspiracy aimed at reducing the price of pravastatin, as disclosed by the DOJ.
To forestall future wrongdoing, Teva affirms the implementation of robust and consistent controls, asserting its commitment to prevent such activities. The company expressed its contentment in resolving these charges and remains optimistic in its ability to address associated civil claims.
The DOJ’s persistent drive to eradicate price-fixing in the generic sector has resulted in amassed settlements totaling $681 million. As the DOJ continues to crack down on anticompetitive practices, the pharmaceutical industry is facing a transformative phase aimed at ensuring fair pricing and competition for the betterment of healthcare accessibility and affordability.
