Teva Pharmaceutical Industries Ltd. and Glenmark Pharmaceuticals Ltd. have agreed to pay a total of $255 million in criminal penalties and make divestitures as part of a settlement with the US Department of Justice (DOJ) over price-fixing of commonly used drugs. The settlement is the largest penalty paid for a domestic antitrust cartel, the DOJ said in a statement.
Both companies admitted to fixing prices of pravastatin, a widely used cholesterol medication, between 2013 and 2015. Teva also admitted to breaking antitrust rules related to its clotrimazole medication for skin infections, and tobramycin, which treats eye infections and cystic fibrosis.
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.
Teva will pay $225 million and divest its pravastatin business
Teva, the world’s largest generic-drug maker, will pay $225 million over the course of five years as part of the deferred prosecution agreement announced on Monday. It will also have to donate $50 million worth of clotrimazole and tobramycin, two other drugs it admitted to price fixing, to humanitarian organizations that help Americans in need.
In addition, Teva agreed to sell off its business lines that make pravastatin to a third party approved by the DOJ. This divestiture is intended to restore competition in the market for the cholesterol drug, which was harmed by Teva’s illegal conduct.
Under the agreement, federal prosecutors will dismiss the charges in three years if Teva abides by the settlement terms.
Glenmark will pay $30 million and divest its pravastatin business
Glenmark, a Mumbai-based drugmaker, said that it has entered into a pact with the DOJ to resolve all of its court proceedings related to pricing of pravastatin. It will pay $30 million in six installments over the next two years as part of the settlement.
Glenmark also agreed to divest its pravastatin business to a third party approved by the DOJ within six months of the agreement. This divestiture is also meant to restore competition in the market for the cholesterol drug.
Glenmark said that it has cooperated fully with the DOJ during the investigation and that it has taken steps to strengthen its compliance program and internal controls.
DOJ warns companies in heavily regulated industries
The DOJ said that this settlement marks a significant milestone in its ongoing efforts to hold generic drug companies accountable for their anticompetitive conduct. It also warned that companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism.
“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. “These cases demonstrate our commitment to pursuing justice for American consumers who rely on generic drugs.”
