Teva Pharmaceutical Settles for $450 Million

By Nate Raymond

BOSTON (Reuters) – Teva Pharmaceutical Industries Ltd has agreed to pay $450 million to settle allegations of using charities to cover Medicare patients' out-of-pocket costs, effectively paying kickbacks to enhance sales of its multiple sclerosis drug, Copaxone. Additionally, it faced allegations regarding price-fixing for generic drugs.

The U.S. Department of Justice announced these settlements, including a $425 million resolution for a lawsuit from 2020 linked to an industry investigation into financial support for patient assistance charities. This broader investigation previously resulted in over $1 billion in settlements involving other drugmakers, charities, and a pharmacy.

Teva, an Israel-based company, indicated that it could face triple damages up to $10 billion under the False Claims Act. The Justice Department also revealed a $25 million civil settlement resolving claims about conspiracy to fix prices and allocate markets for two generic drugs. In a related criminal case, Teva agreed to pay $225 million last year.

Teva announced it would pay the settled amount over six years but did not admit any wrongdoing, asserting that its charitable donations assisted MS patients in accessing necessary medications.

Pharmaceutical companies are barred from subsidizing Medicare patients' co-payments but can donate to independent charities providing such assistance. The government alleged that Teva paid over $350 million to two charitable foundations from 2006 to 2017 to cover co-payments for Copaxone, turning these charities into tools for illegal kickbacks. During this time, Teva significantly increased the drug's price from about $17,000 to $85,000 annually, generating $3.8 billion in revenues in 2017 alone.