Teva, Glenmark ⁠reach $255M price-fixing settlement with DOJ, agree to offload certain meds

After admitting to running a price-fixing scheme as part of a deal with the Department of Justice, not only will generic makers Teva and Glenmark Pharmaceuticals pay hefty fines, but they'll also be forced to divest certain products.

The two companies reached a deferred prosecution agreement (DPA) with the government, meaning the U.S. will charge the companies but it won’t move forward with the case as long as Teva and Glenmark follow certain terms. If they hold up their end of the agreement, the charges will then be dismissed.

The consequences of a conviction could be disastrous as they would likely include exclusion from federal healthcare programs such as Medicare and Medicaid. To avoid such punishment, Teva will pay a fine of $225 million over five years.

Glenmark, for its part, must pay $30 million.

Teva’s penalty is “the largest to date for a domestic antitrust cartel,” the DOJ wrote in its recent release.

Aside from the financial penalty, Teva must also donate $50 million worth of generic versions of antifungal cream clotrimazole and antibiotic tobramycin to humanitarian organizations. The company will also divest its generic cholesterol med pravastatin to a third-party buyer in what the government called an “extraordinary remedy." Glenmark must also divest its own version of pravastatin.

In the DPA, Teva confessed that one of its former employees agreed with competitors that the company wouldn’t bid on contracts to sell certain drugs three times between 2013 and 2015. The scheme affected the markets for clotrimazole, tobramycin and pravastatin, and the employee left Teva in 2016.

Meanwhile, Glenmark admitted to participating in a conspiracy to lower the price of pravastatin, according to the DOJ.

Teva has “robust and consistent” controls in place meant to prevent such activity from happening again and it pledges to maintain these provisions, the company said in a statement.

“The company is pleased to put these charges behind us and believes that we remain well-positioned to defend against related civil claims,” the statement continued.

As part of its long-running effort to stamp out price-fixing in the generic industry, the DOJ has collected settlements totaling $681 million.