The US has fined top drug-making companies Teva Pharmaceuticals and Glenmark Pharmaceuticals a total of $255 million for price-fixing fixing medications, including a generic cholesterol drug that they will now divest.
The Department of Justice (DoJ) announced that Teva will also make a $50 million drug donation to humanitarian organisations, along with a $225 million criminal penalty -- the largest to date for a domestic antitrust cartel.
Glenmark will pay $30 million to resolve charges alleging that it conspired with Teva to fix prices for that cholesterol drug, called pravastatin.
Both companies will face prosecution if they violate the terms of the agreements, and if convicted, would likely face mandatory debarment from federal health care programmes, the DoJ said in a statement late on Monday.
The agreements each require the companies to undertake remedial measures, including the “timely divestiture of their respective drug lines for pravastatin, a widely used cholesterol medicine that was a core part of the companies’ price-fixing conspiracy”.
This extraordinary remedy forces the companies to divest a business line that was central to the misconduct.
Teva must also donate $50 million worth of clotrimazole and tobramycin, two additional drugs with prices affected by Teva’s criminal schemes, to humanitarian organisations that provide medication to Americans in need.
“Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism,” said Assistant Attorney General, Jonathan Kanter.
Pravastatin is a commonly prescribed cholesterol medication that lowers the risk of heart disease and stroke; clotrimazole is commonly prescribed to treat skin infections; and tobramycin is commonly prescribed to treat eye infections and cystic fibrosis.
During the multi-year investigation, the Antitrust Division and its law enforcement partners uncovered price-fixing, bid-rigging and market-allocation schemes affecting many generic medicines and charged seven generic pharmaceutical companies for their participation in the schemes.
With the latest agreements, all seven companies have resolved their criminal charges and collectively agreed to pay more than $681 million in criminal penalties.