The US authorities have filed a new lawsuit against Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) over allegations that it submitted false claims to the Medicare national health insurance program.
Teva share price is down 9.79% on Wall Street at $10.45, giving a market cap of $11.4 billion.
In the lawsuit filed with the Boston District Court, the US Department of Justice charges that the Israeli pharmaceutical company violated the False Claims Act between 2006 and 2015 and paid two independent charitable funds more than $300 million to cover co-payments of Copaxone patients.
The US Justice Department claims that Teva used the funds to protect the patients from a quadrupling of the price of multiple sclerosis treatment Copaxone.
The Justice Department said this led to hundreds of millions of dollars of false claims and a corresponding amount of revenue for Teva, and circumvented Congress’ intent that co-payments help keep drug prices down.
"Unbound by any market check on pricing due to its payment of illegal kickbacks, Teva left American taxpayers to shoulder the high prices that Teva set for Copaxone, while Teva reaped for itself the resulting profits," the complaint said.
The government is seeking triple damages for violations of the federal False Claims Act.
Teva said it would defend the lawsuit, which "Only seeks to further restrict patients’ access to important medicines and healthcare."
Published by Globes, Israel business news - en.globes.co.il - on August 18, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020