Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc., collectively known as Teva, have agreed to a $450 million settlement to resolve allegations of violating the Anti-Kickback Statute (AKS) and the False Claims Act (FCA). The company, based in Parsippany, New Jersey, is recognized as the largest generic drug manufacturer in the United States. The settlement amount was determined based on Teva's financial capacity.
"Kickbacks designed to induce referrals or purchases of healthcare goods or services distort physician and patient decision-making, thwart competition and bypass controls put in place to protect federal health care programs," stated Principal Deputy Assistant Attorney General Brian M. Boynton from the Justice Department’s Civil Division. "The Justice Department is committed to pursuing those who engage in kickback violations, including drug manufacturers, to ensure that federal health care programs continue to serve the interests of taxpayers and program beneficiaries."
The settlement addresses two alleged kickback schemes by Teva. Firstly, it resolves claims filed by the United States in Massachusetts in August 2020 that accused Teva of paying Medicare patients' copayments for its multiple sclerosis drug Copaxone from 2006 through 2017 while increasing its price. It was alleged that Teva coordinated with third parties like a specialty pharmacy and two copay assistance foundations to cover these costs illegally.
Secondly, Teva USA has settled separate allegations of conspiring with other generic drug manufacturers to fix prices for pravastatin and two other drugs—clotrimazole and tobramycin. Previously, under a deferred prosecution agreement with the Justice Department’s Antitrust Division regarding related criminal charges, Teva USA paid a $225 million penalty.
"Kickback arrangements by pharmaceutical companies escalate the costs for critical drugs used by our citizens and federal health care programs," said U.S. Attorney Jacqueline Romero for the Eastern District of Pennsylvania.
"For far too long, Teva gamed the charitable foundation process by paying kickbacks through two foundations," commented Acting U.S. Attorney Joshua S. Levy for Massachusetts.
"The Medicare program’s copay structure serves as a safeguard against artificial inflation of drug prices," noted Assistant Inspector General Adam Globerman from HHS-OIG.
Special Agent Patrick J. Hegarty emphasized efforts to protect TRICARE's integrity: "When pharmaceutical corporations artificially inflate prices, they place an unnecessary financial burden on TRICARE."
Since 2017, over $1 billion has been collected from pharmaceutical companies involved in similar allegations involving third-party foundations unlawfully covering patient copays.
This resolution underscores ongoing efforts against healthcare fraud using tools like the False Claims Act. Tips about potential fraud can be reported at 800‑HHS‑TIPS (800-447-8477).
