With the walls closing in around it on a yearslong generics price-fixing probe, Israeli drugmaker Teva faced two options: Reach a deal with prosecutors or gamble. Teva chose to roll the dice, and now it finds itself facing conspiracy charges—and a potentially bigger penalty on the horizon.
Federal prosecutors have charged Teva with conspiring to fix prices for a range of generic medicines between 2013 and 2015 as part of an industrywide scheme to overcharge consumers by more than $350 million, the U.S. Department of Justice (DOJ) said in a Tuesday release.
The charges make Teva the seventh drugmaker indicted in the alleged scheme, the DOJ said, and come after the company snubbed its nose at the government's settlement offers.
In a release, Teva said federal prosecutors showed an "unwillingness" to consider deals that did not "deeply impact Teva and the stakeholders who depend on the company, including the patients who benefit from our medicines."
The DOJ indicted Teva on three counts of criminal conspiracy and acting as a ringleader for a group of drugmakers that have previously pleaded guilty to their own price-fixing charges and are now cooperating with prosecutors.
In July, Taro Pharma became the latest company to join those ranks, reaching a $419 million deal to defer criminal prosecution and turn state's witness in the probe.
Novartis reached a separate agreement with the DOJ in March, agreeing to pay $195 million, enter deferred prosecution and cooperate with prosecutors. The Swiss drugmaker and its generics unit Sandoz immediately became the biggest fish yet snared.
As for Teva, the drugmaker has denied its involvement in the price-fixing probe, saying a four-year internal investigation turned up no wrongdoing on the company's part.
Teva was so sure of its ability to beat the case that it reportedly walked away from settlement negotiations back in May, effectively daring the DOJ to level charges as the drugmaker chipped in on the global COVID-19 effort.
That month, The New York Times reported Teva bet its coronavirus response role, including donating millions of doses of antimalarial hydroxychloroquine sulfate to hospitals, would put the DOJ in a bind on its decision to indict.
That gamble has now definitively gone bust, and Teva could be facing an even bigger penalty down the road on top of multiple multibillion-dollar legal overhangs the drugmaker already faces in its opioid and copay charities litigations.
Earlier this month, the DOJ charged Teva with paying kickbacks to two copay assistance charities as part of a scheme to pump up prescriptions of multiple sclerosis med Copaxone.
The filing in a Boston district court alleged the company paid more than $300 million to those third-party organizations and defrauded Medicare of "hundreds of millions" in reimbursements. Teva defended its involvement with the charities and said in a statement that it was "dedicated to patient health and appropriate access to affordable medicines."