Teva (NYSE:) Pharmaceutical Industries Ltd has agreed to a $450 million settlement to resolve accusations that it used patient-aid charities as a means of paying bribes and price-fixing generic drugs. The U.S. Department of Justice announced the settlements Thursday, including $425 million for a lawsuit filed in Boston federal court in 2020, over the company’s support of patient-aid charities .
The lawsuit was part of a broader investigation into the pharmaceutical industry’s financial dealings with these charities, which has already resulted in more than $1 billion in settlements from various drug manufacturers, charities and a pharmacy. Teva’s settlement specifically concerns its multiple sclerosis drug, Copaxone, with allegations that the company used charities to cover out-of-pocket costs for Medicare patients to illegally increase its sales.
The Justice Department’s complaint alleged that Teva paid more than $350 million to two charities, the Chronic Disease Fund and The Assistance Fund, from 2006 to 2017. These payments were allegedly made to subsidize Copaxone’s copayments, acting effectively as bribes. During this period, Copaxone’s price rose from around $17,000 to $85,000 per year, with the drug generating $3.8 billion in revenue in 2017.
Additionally, Teva will pay $25 million in a civil settlement over allegations it conspired to fix prices and divide markets for two generic drugs. This follows a $225 million payment made last year to resolve related criminal charges.
Teva, which is headquartered in Israel, said it would pay the full settlement amount over a six-year period. The company also said it has not admitted any wrongdoing in any of the regulations and maintains its donations were intended to support patient access to essential medicines. Under U.S. law, pharmaceutical companies are not allowed to directly subsidize copayments for Medicare beneficiaries, but can contribute to independent charities providing copayment assistance.
Reuters contributed to this article.
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