Pravastatin sodium/Fenofibrate

On Monday, Teva Pharmaceuticals and Glenmark Pharmaceuticals became the sixth and seventh drugmakers to resolve criminal charges as a result of the Department of Justice’s yearslong investigation into generic drug price fixing. The settlement agreement requires both companies to pay hefty fines as well as divest their drug lines for pravastatin, a widely used statin that lowers cholesterol. In 2019, the DOJ showed that it was serious about cracking down on generic drug price fixing by issuing two multi-million dollar fines to Heritage Pharmaceuticals and Rising Pharmaceuticals. The legal case at the center of Monday’s settlement dates back to 2020, when the DOJ indicted Teva over alleged price fixing conspiracies with four other generic drugmakers — Glenmark, Sandoz, Apotex and Taro Pharmaceuticals. The indictment charged the pharma companies with raising prices, rigging bids and allocating customers for generic drugs. These medications included pravastatin, as well as generic drugs for autoimmune diseases, pain, cancer and cystic fibrosis. In 2020, Taro, Sandoz and Apotex admitted their roles in the alleged schemes and paid fines respectively totaling $205.7 million, $195 million and $24.1 million. With Monday’s settlement, Teva and Glenmark have also admitted to their roles in running a price fixing scheme and agreed to pay criminal penalties. The DOJ ordered Teva to pay a $225 million penalty, which the department said is the largest fine to date for “a domestic antitrust cartel.” As for Glenmark, the DOJ issued the firm a $30 million fine. The settlement agreement also requires both Teva and Glenmark to divest their respective drug lines for pravastatin, which was at the center of the companies’ alleged price fixing scheme. In addition to the $225 million penalty, the DOJ ordered Teva to donate $50 million worth of drugs to humanitarian organizations. Those drugs are antifungal medication clotrimazole and antibiotic drug tobramycin The prices of both were affected by the conspiracy, the DOJ said. If either company violates the terms of their settlement agreement, they will face prosecution. If convicted, they would likely get banned from federal healthcare programs like Medicare and Medicaid, according to the DOJ’s statement. “When a firm is criminally convicted, it is barred from participating in U.S. federal healthcare programs. Teva Pharmaceuticals is one of the largest generic pharmaceutical firms in the world, so barring it from much of the healthcare industry would be dangerous. The right response is to shrink the firm and force it to disgorge illicit profits, which is what the antitrust division did,” Matt Stoller, director of research at the antitrust advocacy group American Economic Liberties Project, said in a statement. In a press release issued Monday, Teva said it “fosters a culture of compliance” and “has robust and consistent compliance controls in place” to prevent price fixing schemes from recurring in the future. Glenmark did not respond to MedCity News’ request for comment. In 2019, Heritage agreed to pay more than $7 million to settle its price fixing case, and Rising was issued a penalty totaling more than $3 million. Collectively, seven drugmakers have agreed to pay nearly $700 million as a result of the DOJ’s crackdown on generic drug price fixing.

The government has reached price-fixing settlements with seven companies totaling more than $681 million. After admitting to running a price-fixing scheme as part of a deal with the Department of Justice, not only will generic makers Teva and Glenmark Pharmaceuticals pay hefty fines, but they'll also be forced to divest certain products. The two companies reached a deferred prosecution agreement (DPA) with the government, meaning the U.S. will charge the companies but it won’t move forward with the case as long as Teva and Glenmark follow certain terms. If they hold up their end of the agreement, the charges will then be dismissed. The consequences of a conviction could be disastrous as they would likely include exclusion from federal healthcare programs such as Medicare and Medicaid. To avoid such punishment, Teva will pay a fine of $225 million over five years. Glenmark, for its part, must pay $30 million. Teva’s penalty is “the largest to date for a domestic antitrust cartel,” the DOJ wrote in its recent release. Aside from the financial penalty, Teva must also donate $50 million worth of generic versions of antifungal cream clotrimazole and antibiotic tobramycin to humanitarian organizations. The company will also divest its generic cholesterol med pravastatin to a third-party buyer in what the government called an “extraordinary remedy." Glenmark must also divest its own version of pravastatin. In the DPA, Teva confessed that one of its former employees agreed with competitors that the company wouldn’t bid on contracts to sell certain drugs three times between 2013 and 2015. The scheme affected the markets for clotrimazole, tobramycin and pravastatin, and the employee left Teva in 2016. Meanwhile, Glenmark admitted to participating in a conspiracy to lower the price of pravastatin, according to the DOJ. Teva has “robust and consistent” controls in place meant to prevent such activity from happening again and it pledges to maintain these provisions, the company said in a statement. “The company is pleased to put these charges behind us and believes that we remain well-positioned to defend against related civil claims,” the statement continued. As part of its long-running effort to stamp out price-fixing in the generic industry, the DOJ has collected settlements totaling $681 million.