Teva faces class-action lawsuit over US antitrust probe into price-fixing

Israeli pharmaceutical giant fielding slew of legal troubles, including internal investigation into bribery

Ricky Ben-David is a Times of Israel editor and reporter

The Jerusalem office of the Israeli drug company Teva Pharmaceuticals (Yonatan Sindel/Flash90)
The Jerusalem office of the Israeli drug company Teva Pharmaceuticals (Yonatan Sindel/Flash90)

The Israeli pharmaceutical giant Teva has been fielding a number of legal troubles in recent weeks, including a class action suit by US investors as a result of a US Department of Justice probe into alleged price-fixing alongside a number of other companies in the field, and an internal investigation into bribery allegations in Romania.

US prosecutors said Wednesday that leading pharmaceutical companies, including Teva Pharmaceuticals and Mylan, have received subpoenas in a wide-ranging antitrust probe of the industry.

US prosecutors accused two former pharmaceutical executives Wednesday — Jeff Glazer, former chief executive of Heritage Pharmaceuticals, and Jason Malek, the former president of the same company — of conspiring with other drug companies to fix prices of an antibiotic, doxycycline hyclate and the diabetes drug glyburide.

“By entering into unlawful agreements to fix prices and allocate customers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines,” said deputy assistant attorney general Brent Snyder.

According to the lawsuit, Teva is accused of making “false and/or misleading statements and/or failed to disclose that [it] was engaging and/or had engaged in conduct that would result in an antitrust investigation” and possible “criminal charges against Teva by the end of 2016 for suspected price collusion.”

“In turn, Teva lacked effective internal controls over financial reporting; and…as a result, Teva’s public statements were materially false and misleading at all relevant times,” read the statement by Rosen Law Firm, a global investor rights law firm.

Earlier this month, Teva revealed that it is in the midst of an internal investigation into allegations that the company has been bribing Romanian healthcare workers into prescribing its medication.

The probe was launched in 2015 after an anonymous tipster sent a series of emails to Teva’s chief executive, accusing the company of courting Romanian doctors — paying them speaking and consulting fees, covering travel expenses — in exchange for their recommending a Teva medication “to as many patients as possible,” according to the email sent to the company by the tipster and which was reviewed by Reuters. The emails were also sent to Teva’s audit committee and compliance staff, according to the report.

The specific medication in question was the multiple sclerosis drug Copaxone, which generated $1.1 billion in sales in Teva’s last quarter, the company said last month in a regulatory filing according to Reuters.

The tipster informed the company that the information was also being sent to the Securities and Exchange Commission and the US Department of Justice.

According to a filing last month cited by Reuters, Teva has been in “advanced discussions” with both the Justice Department and the SEC to settle separate bribery allegations in other foreign countries including Russia, the Ukraine and Mexico.

AFP contribued to this report.

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