The United States Department of Justice announced on August 21, 2023 deferred prosecution agreements resolving criminal antitrust charges against Teva Pharmaceuticals USA, Inc. (“Teva”) and Glenmark Pharmaceuticals Inc., USA (“Glenmark”). As part of the agreements, both companies will divest a key business line involved in the misconduct, and as an additional remedial measure, Teva will make a $50 million drug donation to humanitarian organizations. Teva will pay a $225 million criminal penalty (the largest to date for a domestic antitrust cartel) and Glenmark will pay a $30 million criminal penalty. 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 programs.
As part of the agreements, Teva admitted to participating in three antitrust conspiracies that affected essential medicines, including pravastatin, clotrimazole and tobramycin, and Glenmark admitted to participating in a conspiracy to fix the price of pravastatin. 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. Also as part of the agreements, the parties filed joint motions, which are subject to approval by the Court, to defer prosecution and trial on the filed charges for the three-year terms of the agreements or until after the criminal penalties are paid, whichever occurs later.
The agreements each require the companies to undertake remedial measures, including the timely divestiture of their respective drug lines for pravastatin, which was a core part of the companies’ price-fixing conspiracy. Teva must also donate $50 million worth of clotrimazole and tobramycin, two additional drugs with prices affected by Teva’s criminal schemes, to humanitarian organizations that provide medication to Americans in need. Both Teva and Glenmark have agreed, among other things, to cooperate with the department in the ongoing criminal investigations and resulting prosecutions, report to the department on their compliance programs, and modify those compliance programs where necessary and appropriate.
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 August 21, 2023 agreements, all seven companies have resolved their criminal charges and collectively agreed to pay more than $681 million in criminal penalties.
In announcing the agreements, an Assistant Attorney General of the Justice Department’s Antitrust Division stated, “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. The resolutions include extraordinary remedial measures that require the breakup of assets and restore competition to the industry. Companies in heavily regulated industries are on notice that the division will not hesitate to hold them accountable and will not tolerate recidivism.”
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