On October 10, 2024, the DOJ announced that Teva Pharmaceuticals had agreed to pay $450 million to resolve two matters, one of which was the result of an investigation conducted pursuant to the False Claims Act (FCA).
According to the DOJ, the settlement encompasses two alleged schemes. The first involved allegations that Teva violated the Anti-Kickback Statute (AKS) and the FCA by paying Medicare patients’ copays for its multiple sclerosis drug Copaxone, “while steadily raising Copaxone’s price.” The press release alleges that “Teva coordinated and conspired with multiple third parties, including a specialty pharmacy and two allegedly independent copay assistance foundations, to ensure that purported donations to the foundations were used specifically to cover the copays of Medicare Copaxone patients, which Teva knew was prohibited by the AKS, and that Teva thereby caused the submission of false claims to Medicare.”
The second alleged scheme involved Teva conspiring with other generic drug manufacturers to fix the prices for pravastatin, a drug used to treat high cholesterol, as well as two other generic drugs. For this scheme, Teva agreed to enter into a deferred prosecution agreement with the DOJ’s Antitrust Division to resolve related criminal charges, and agreed to pay a criminal penalty of $225 million (apparently inclusive of the total settlement of $450 million).
Interestingly, despite the shockingly high settlement amount, the DOJ’s press release notes that the settlement was based on Teva’s “ability to pay.” That likely means that the DOJ initially demanded more money from Teva, but Teva went through a process during which the DOJ inspected its finances and concluded that it could not pay more than the agreed-upon amount. Under the FCA settlement agreement, Teva and the DOJ agreed to a payment plan which will extend through 2029.
It is unclear what triggered the DOJ’s investigation, although it does not appear that this matter was the result of a whistleblower qui tam lawsuit.
The attorneys at Chilivis Grubman represent individuals and entities of all types and sizes in connection with False Claims Act litigation and qui tam litigation. If you need assistance with such a matter, please feel free to contact us.