Teva Pharmaceuticals, a generic drug maker, has agreed to pay $225 million to settle allegations of price-fixing related to the sales of a cholesterol-lowering drug. The U.S. Department of Justice has mandated that Teva also divest its business that manufactures and sells the generic version of the drug, Pravachol, called pravastatin. Another generic drug maker, Glenmark Pharmaceuticals, has also agreed to pay a $30 million criminal penalty and divest its pravastatin business.
Teva has attributed the price-fixing agreements to a single former employee who left the company in 2016. The U.S. arm of the Israel-based company has claimed that this employee had struck agreements with Teva’s competitors, thereby limiting competition between 2013 and 2015.
The U.S. Department of Justice had charged seven generic drug makers, including Teva and Glenmark, with price fixing, bid rigging, and market allocation schemes. The cases have been settled with deferred prosecution agreements. Avoiding a trial was crucial for these companies, as a guilty verdict could have resulted in mandatory bans from participating in federal health programs such as Medicare and Medicaid. Collectively, these companies will pay $681 million in fines and face additional penalties.
