Teva ponies up $420M to settle with investors who said company hid price-fixing scheme

Generics giant Teva will pay $420 million to settle a lawsuit with shareholders who said the company concealed a price-fixing scheme that allowed it to raise prices on some drugs by more than 1,000%.

The suit, filed in federal district court in Connecticut, charged Teva with conspiring with other companies to increase prices. In hiding the scheme, Teva artificially inflated the price of its shares, investors claimed.

The sides finalized the settlement hours before a deadline for filing summary judgement motions. The deal will have to be approved by the court before becoming final.

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The settlement ranks among the five largest securities settlements by a pharma manufacturer, according to lawyers at Bleichmar, Fonti & Auld LLP, which represented the plaintiffs. Teva denied wrongdoing in the case and said in a statement that insurance will cover most of the settlement.

“Teva does not admit any responsibility and denies the claims,” the company said. “Settlement of the matter reflects the general interest of Teva and of the patients who continue to rely on us daily for the largest generic drugs portfolio in the world.”

The case dates to 2016 when shareholders sued amid a government investigation into alleged price fixing by several major pharma companies.

In 2020, the U.S. Justice Department sued Teva, alleging that the company conspired with competitors to raise prices for generic drugs. The DOJ indicted Teva on three counts of criminal conspiracy and acting as a ringleader for a group of drugmakers—including Taro and Novartis—that had previously pleaded guilty to their own price-fixing charges and then cooperated with prosecutors. 

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Aside from its price-fixing litigation, Teva is also among the drugmakers facing opioid lawsuits. Last month a New York jury found Teva guilty of contributing to the state’s opioid crisis. An upcoming trial will determine how much Teva must pay. Several other companies involved in the action—including AbbVie, Johnson & Johnson—inked settlements, leaving Teva as the lone manufacturer defendant.

Last year, Teva CEO Kåre Schultz said he was “optimistic” a nationwide opioid deal could come within a year for his company.