Teva settles further price-fixing lawsuits in the US

Teva Pharmaceutical Industries (TSX: TEVA, NYSE: TEVA) has settled another lawsuit alleging price-fixing in the United States. Teva will pay $450 million in court-approved settlements in the United States, one for $425 million and the other for $25 million, without admitting any wrongdoing. The settlement amounts will be distributed over six years.

The first, larger settlement relates to a lawsuit filed by the US Department of Justice against Teva and other companies in 2020, alleging price gouging that led to overpayments totaling $350 million by US consumers. The allegation was that Teva used patient aid charities to increase use of its then-leading product, Copaxone, a treatment for multiple sclerosis. According to the claim, Teva made donations to these charities that would cover patients’ co-payments for Copaxone, in effect using the charities to pay kickbacks to patients for use of the drug, which is in violation of the federal anti-kickback statute. The alleged indirect result was a sharp rise in the price of Copaxone, from $17,000 annually in 2006 to $85,000 in 2017.

The second case, which was settled for $25 million, concerned other allegations of price fixing in the generic drug industry. Two years ago, Teva reached a similar settlement in such a case, agreeing to pay a $225 million fine and sell pravastatin, a generic treatment for lowering cholesterol and triglycerides, to another company. In addition, Teva has pledged to donate $50 million worth of two generic drugs, clotrimazole and tobramycin, to charity.

Two years ago, Teva also reached a settlement in the case of the sale of opioids, painkillers that caused addiction in about half a million patients in the United States. In that case, Teva agreed to pay $4.25 billion in damages, including $3 billion in cash.

In the past few years, Teva has taken action to settle several lawsuits, as well as to reduce the high leverage that has affected it since its acquisition of Actavis, Allergan’s generic drug division, in 2015.

Since Teva announced the settlement of the opioid case two years ago, its stock price has risen more than 170%, reaching a market capitalization of NIS 75 billion, although this is still well below its peak of NIS 250 billion.

In this morning’s trading on the Tel Aviv Stock Exchange, the price of Teva shares fell by 1.55% to 65.26 shekels.

Published by Globes, Israel Business News – en.globes.co.il – on October 13, 2024.

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