Justice Department Alleges Teva Pharmaceutical's U.S. Business Violated Anti-Kickback Law

By Micah Maidenberg

Prosecutors accused Teva Pharmaceutical Industries Ltd.'s business for the U.S. and a subsidiary of violating an anti-kickback law by providing foundations with funds to cover the cost of patients' Medicare co-pays for a multiple sclerosis drug whose price it had raised.

Teva's U.S. unit and the subsidiary used the foundations as conduits, intending for the $300 million it provided the organizations between 2006 and 2015 to cover the co-pays required under Medicare for Copaxone, used to treat multiple sclerosis.

American depository receipts for Teva Pharmaceutical Industries, based in Israel, were down 10% in trading in New York.

From late in 2006 until 2015, the Teva U.S. business and subsidiary raised the price of Copaxone from about $17,000 a year to $73,000 a year, according to the suit.

"Teva intended the payments to ensure that Copaxone patients never faced the steep prices that Teva charged for its drug, thus inducing the patients, including Medicare patients, to purchase the drug," federal prosecutors say in the suit, which was filed in the U.S. District Court for Massachusetts.

Teva denied the claims in the suit and said it would defend itself against the allegations.

"This case brought by the Department of Justice regarding these charitable contributions only seeks to further restrict patients' access to important medicines and healthcare," a spokeswoman Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc., the defendants in the suit, said in a statement.

The company's legacy charity program for multiple sclerosis assistance was meant to "support patients who needed important treatment options by appropriately providing charitable contributions to independent charitable foundations that helped patients obtain access to medicines," the spokeswoman said.

The Justice Department has probed other drugmakers for the relationship with foundations that help patients with copays.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

August 18, 2020 13:24 ET (17:24 GMT)

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