Teva shareholder sues after $450m US settlement

Last weekend, Teva Pharmaceuticals Industries (Teva: TEVA, NYSE: TEVA) announced that it had reached a settlement with the US Department of Justice and would pay fines totaling $450 million, to be paid over six years, without admitting any wrongdoing. , to the defendants. Ending the lawsuits filed against it by the American authorities. These alleged price gouging, illegal payments of kickbacks through patients’ charities to cover their co-payments to purchase Medicare’s multiple sclerosis treatment Copaxone from Teva.

Following the agreed-upon penalty, a subsidiary lawsuit was filed yesterday in the Tel Aviv District Economic Court against the directors and employees of Teva, alleging that they agreed to and concealed the alleged acts that led to the penalty.

Avraham Barak, a shareholder in Teva, and Lightcom (Israel) Ltd., which he controls and which also owns shares in Teva, allege that Teva’s board of directors was involved in the acts in question, made decisions about their submission, and also decided how to conceal them.

“This fraudulent activity by Teva was not a trivial matter carried out by some low-ranking people in the company, but a long-term and significant action that could not have been carried out without the knowledge, planning and involvement of the most senior people in the company,” Teva said in a statement of claim filed. From the lawyer. Shahar Ben-Meir, lawyer. Yitzhak Aviram, lawyer. Renan Gersht, attorney. Ophir Naor, the lawyer. Adi Granot says.

The statement also said, “There is no doubt and there can be no doubt that Copaxone sales are the most important business figure, given the large and significant proportion of this drug in Teva’s total revenues.”

The statement of claim stated that in the past few years, a series of criminal cases were uncovered that led to damage to Teva’s profits and reputation and the payment of huge sums of money in fines.

One year ago, Teva agreed to pay $4.3 billion in compensation to settle claims against it in the United States that arose from its involvement in the sale of opioid painkillers, which caused addiction and even led to death in about half a million American patients.

Globes reported that following that settlement, Barak and Lightcom, along with other claimants, filed a lawsuit with the Tel Aviv District Economic Court, and in settling the case, Teva’s insurers agreed to pay $40 million — the highest amount paid in a derivative action. In Israel so far. A derivative action is one in which a shareholder or director brings a lawsuit in the name of a company, usually against its management, for damages, when the company itself refrains from suing.

In the derivative action now filed regarding the Copaxone commission and price-fixing matters, the claimants allege that “this practice of knowingly committing criminal offenses could not have been part of the Company’s business, and it is clear that all such actions were carried out with the knowledge and under the supervision of the Board of Directors.” According to his decision.”

Yesterday’s proceedings began with a request to obtain documents that would appear among Teva’s directors and officials apparently involved in this case, in order to file a sub-suit against them.

A similar application was made in connection with the Copaxone case several years ago by shareholders represented by, among others, Adv. Robert Epstein and lawyer. Tomer Bram, hearings in that lawsuit are expected to resume after the settlement in the United States.

“Teva” Company said in response to the report: “The statement of claim has not been submitted to “Teva” Company yet, and when “Teva” Company receives it, it will respond through the appropriate legal channels.”

Published by Globes, Israel Business News – en.globes.co.il – on October 14, 2024.

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