August 29, 2023. As a result of a multi-year investigation by the Antitrust Division, two major generic drug companies in the United States have recently agreed to pay over a quarter of a billion dollars to resolve price-fixing charges. The Justice Department announced deferred prosecution agreements (DPA) with Teva Pharmaceuticals and Glenmark Pharmaceuticals, both of which will divest key business lines involved in the misconduct. While there was no whistleblower in these cases, there are financial incentives for whistleblowers to report violations of antitrust laws under the False Claims Act.
To fully understand the gravity of this situation, it is important to note that Teva will pay a $225 million criminal penalty, which is the largest to date for a domestic antitrust cartel. Glenmark, on the other hand, will pay $30 million. Teva must also make a donation of $50 million of infection medications clotrimazole and tobramycin to humanitarian organizations. Because they focused on this drug in their price fixing schemes, both companies must divest themselves of their drug lines for the cholesterol drug pravastatin. These three drugs were central to the pharmaceutical companies’ price-fixing schemes. The companies agreed to also bolster their compliance departments and cooperate with ongoing criminal investigations. The companies sought to defer prosecution and trial to either after paying the criminal penalties or after the three year terms of the deferred prosecution agreements are up. If they are convicted, the companies will be debarred from participating in any federal healthcare program.
These agreements are part of an ongoing investigation by the Department of Justice’s Antitrust Division into seven pharmaceutical companies for their collusion in price-fixing, bid-rigging, and market allocation schemes around generic medications. As the Assistant Attorney General of the Justice Department’s Antitrust Division said about this case, “Today, the Antitrust Division and our law enforcement partners hold two more pharmaceutical companies accountable for raising prices of essential medicines and depriving Americans of affordable access to prescription drugs. The resolutions include extraordinary remedial measures that require the breakup of assets and restore competition to the industry.” Price-fixing schemes reduce competition in the pharmaceutical industry, shutting out consumers from affordable medications. It is important to remember that the purpose of antitrust laws is to encourage competition and fair market practices, rather than allowing a handful of companies to dominate and control pricing. The seven pharmaceutical companies involved in these schemes have agreed to pay more than $681 million in criminal penalties.
By holding these companies accountable and requiring divesting drug product lines, the government is taking a proactive stance in discouraging companies from engaging in anti-competitive practices in the future. It remains to be seen how this will affect the generic drug market moving forward, but for now, we can celebrate the fact that justice has been served.
If you would like to report drug pricing fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.