The "Toronto Star," Canada's leading daily newspaper, has published a report saying that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) allegedly offered pharmacies in Ontario illegal payments to buy opiod pain relievers Fentanyl and Oxycodone from it and offer the drugs to their customers.
The newspaper gave its findings to the Ontario provincial government for a response, and the government has opened an investigation into the matter. According to e-mails sent over the past two years and obtained by the "Toronto Star," a Teva representative offered a group of Ontario pharmacies a payment amounting to 15% of the drug price for buying it from Teva.
According to the newspaper report, payments by pharmaceutical companies to pharmacies (known as rebates) are a well-known practice in the industry. They are given in the form of cash, gift cards, or free excursions, all of which are illegal in Ontario.
"Rebates provided by drug manufacturers to pharmacies are illegal. I take any allegations of non-compliance with these rules very seriously and have asked the Ministry to look into these allegations," Ontario Minister of Health and Long Term Care Eric Hoskins told the "Toronto Star." Teva told the Canadian newspaper that it observed the laws and regulations wherever it did business. The company added that it had forbidden giving this type of discount, and that Teva Canada would fully cooperate with the Ontario Ministry of Health's investigation, and that it was confident that it was complying with the law.
According to figures obtained by the Toronto Star from the government insurance plan in the newspaper's probe, pharmacies in Ontario Province held a substantially larger stock of Teva's version of Oxycodone than the versions made by Teva's competitors. The newspaper also reported that the Ontario government had paid over $50 million since 2012 to cover the costs of Teva's Oxycodone, six times as much as it paid for all the other generic versions combined.
The "Toronto Star" said that this was not the first time that Teva had been mentioned in the context of payments to pharmacies in Canada. In 2011, Novopharm, a Canadian generics company controlled by Teva, paid the Ontario government a $10,000 nominal fine for discounts given in the preceding years. The newspaper added that the province was examining suspicions of bribery involving the Costco wholesale chain and five generics companies, including Teva.
Teva's share price has fallen 52% since August, driving its market cap down to $15.1 billion.
Published by Globes [online], Israel Business News - www.globes-online.com - on October 22, 2017
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