WASHINGTON — The Israel-based generic drugmaker Teva Pharmaceuticals has agreed to pay a $225 million fine to settle price-fixing charges related to sales of a major cholesterol-lowering drug and two other medicines, the US Department of Justice (DoJ) said Monday.
The DoJ said the agreement also requires Teva to divest its business making and selling the drug, pravastatin, a generic version of the brand-name medicine Pravachol.
Another generic drug maker, Glenmark Pharmaceuticals, agreed to pay a $30 million criminal penalty and to divest its pravastatin business as well.
In a statement, the US arm of Israel-based Teva blamed a single former employee for striking agreements with Teva competitors that limited competition between 2013 and 2015. That employee left the company in 2016, Teva said.
The pharmaceutical multinational said it will pay the $225 million fine over the next five years in installments of $22.5 million from 2024 through 2027, and $135 million due in 2028. It also said it agreed to donate $50 million worth of two generic products to humanitarian organizations, as part of the deal.
The DoJ had charged seven generic drug makers, including Teva and Glenmark, with price fixing, bid rigging and market allocation schemes in 2020. The seven companies have settled their cases with deferred prosecution agreements. Had any of the cases gone to trial, guilty verdicts could have led to mandatory bans on participation in Medicare, Medicaid and other federal health programs.
The companies collectively agreed to pay $681 million in fines in addition to other penalties.
“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,” Jonathan Kanter, the DoJ’s assistant attorney general in its antitrust division, said in a statement.
“Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism,” he added.