Teva to pay $225 million fine and divest cholesterol drug to settle price-fixing charges

By Ramishah Maruf, CNN

New York (CNN) — Teva Pharmaceuticals agreed to pay more than $200 million in fines and divest a key generic drug treating cholesterol to settle price-fixing charges from the US Department of Justice, the agency announced Monday.

The settlement is the largest penalty paid “for a domestic antitrust cartel,” the DOJ said in a statement. The core drug involved and that will be divested to a third party was pravastatin, a widely used cholesterol medication.

Teva’s rival Glenmark will also pay a $30 million criminal penalty to be paid in six installments, the company said. In a statement, Glenmark President Sanjeev Krishan said the company “has devoted considerable resources to strengthen our compliance practices, ensuring the highest ethical operating standards.”

The DOJ said this agreement brings the total penalties to more than $681 million for a multi-year investigation to uncover price fixing, bid rigging and market allocation schemes in seven pharmaceutical companies. Teva and Glenmark are the two final companies to admit to the price-fixing charges.

In a statement, Teva said it will pay $225 million over the course of five years. It will also have to donate $50 million worth ofclotrimazole and tobramycin, two other drugs it admitted to price fixing, to humanitarian organizations.

“The resolutions include extraordinary remedial measures that require the breakup of assets and restore competition to the industry,” said Assistant Attorney General Jonathan Kanter of the DOJ’s antitrust division, in a statement. “Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism.”

The case has been ongoing since 2020, when the DOJ charged the drugmaker for participating in three price-fixing conspiracies. Both Glenmark and Teva were charged in one count for agreeing to boost prices of pravastatin between 2013 and 2015. Teva also admitted to breaking antitrust rules related to its clotrimazole medication for skin infections, and tobramycin, which treats treat eye infections and cystic fibrosis.

Teva maintained “a single former employee” who left in 2016 “in three instances involving three separate customers between 2013 and 2015, agreed with competitors that Teva would not bid on an opportunity to supply that customer with a particular generic product.”

“The company is pleased to put these charges behind us and believes that we remain well-positioned to defend against related civil claims,” Teva said in a statement.

As part of the agreement, Teva admitted to participating in the three conspiracies, the DOJ said. Glenmark admitted to participating in a conspiracy to fix the price of Pravastatin.

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