Teva Pharmaceutical Industries (TASE: TEVA; NYSE: TEVA) has settled another lawsuit alleging price fixing in the US. Teva will pay $450 million in settlements approved by the court in the US, one of $425 million and the other of $25 million, without admitting wrongdoing. Payment of the settlement amounts will be spread over six years.
The first, larger settlement relates to a lawsuit filed by the US Department of Justice against Teva and other companies in 2020, alleging price fixing that led to overpayments totaling $350 million by US consumers. The allegation was that Teva used charities that assist patients in order to increase the use of its then flagship product, Copaxone, a treatment for multiple sclerosis. According to the prosecution, Teva made donations to these charities that would cover patients’ co-payments for Copaxone, in effect using the charities to pay kickbacks to patients for using the drug, contrary to the federal Anti-Kickback Statute. The alleged indirect result was a sharp rise in the price of Copaxone, from $17,000 a year in 2006 to $85,000 in 2017.
The second case, settled for $25 million, concerned further allegations of price fixing in the generic drugs industry. Two years ago, Teva reached a similar settlement in such a case, agreeing to pay a $225 million penalty and to sell pravastatin, a generic treatment for reducing cholesterol and triglycerides, to another company. In addition, Teva undertook to donate $50 million worth of two generic drugs, clotrimazole and tobramycin, to charity.
Two years ago, Teva also reached a settlement in the affair of the sale of opioids, painkillers that caused addiction in some half a million patients in the US. In that case, Teva agreed to pay compensation of $4.25 billion, $3 billion of it in cash.
In the past few years, Teva has taken action to settle many lawsuits, and also to reduce the high leverage that has weighed on it since it acquired Actavis, the generic drug division of Allergan, in 2015.
Since Teva announced the settlement of the opioids case two years ago, its share price has risen by more than 170%, bringing it to a market cap of NIS 75 billion, although this is still far below its peak value of NIS 250 billion.
In this morning’s trading on the Tel Aviv Stock Exchange, Teva’s share price is down 1.55%, at NIS 65.26.
Published by Globes, Israel business news - en.globes.co.il - on October 13, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.