Pharmaceutical Companies Pay Over $ 400 Million To Resolve Alleged Liability Under Generic Drug Pricing False Representation Act | Takeover bid

Three generic drug makers, Taro Pharmaceuticals USA, Inc., Sandoz Inc. and Apotex Corporation, have agreed to pay a total of $ 447.2 million to resolve alleged violations of the False Claims Act resulting from conspiracies to fix the prices of various generic drugs. These conspiracies would have resulted in increased drug prices for federal health care programs and beneficiaries according to the Justice Department.

The government alleges that between 2013 and 2015, the three companies paid and received compensation prohibited by the anti-recoil law through pricing, supply and customer allocation arrangements with other manufacturers of pharmaceuticals for certain generic drugs manufactured by the companies.

Taro Pharmaceuticals USA, Inc., headquartered in New York City, agreed to pay $ 213.2 million. The Taro drugs allegedly involved in this program treat a wide variety of health conditions, and include etodolac, a nonsteroidal anti-inflammatory drug used to treat pain and arthritis, and nystatin cream and ointment. triamcinolone, a combination of an antifungal drug and a steroid used. to treat certain types of skin infections.

Sandoz Inc., headquartered in New Jersey, agreed to pay $ 185 million. The implicated Sandoz drugs include benazepril HCTZ, used to treat high blood pressure, and clobetasol, a corticosteroid used to treat skin conditions.

Apotex Corporation, headquartered in Florida, has agreed to pay $ 49 million in connection with its sale of pravastatin, a drug used to treat high cholesterol and triglyceride levels.

“Illegal collaboration on the price or supply of drugs increases costs for both federal health care programs and recipients,” said Acting Assistant Attorney General Brian M. Boynton of the ministry’s civil division. of Justice. “The department will use all the tools at its disposal to prevent such behavior and protect these taxpayer-funded programs.”

“These civil regulations are another achievement in my office’s efforts to hold generic drug manufacturers accountable for the consequences of pricing programs, including damage to federal health care programs,” the US prosecutor said. Acting Jennifer Arbittier Williams for the Eastern District of Pennsylvania. . “We will continue to aggressively pursue these violations of the Anti-Recoil Law and the False Claims Law and achieve significant recoveries.”

“Conspiring to raise the prices of generic drugs is illegal and could prevent patients from being able to afford the prescription drugs they need. Americans have the right to buy generic drugs through fair and open competition, not through collusion, ”said Special Agent in Charge Maureen R. Dixon of the Philadelphia Regional Office of the Inspector General , Department of Health and Human Services (HHS-OIG). “The HHS-OIG and our law enforcement partners will continue to investigate allegations of companies engaging in actions that endanger the public and the Medicare program. ”

As part of their settlement agreement, each company also entered into a five-year Corporate Integrity Agreement (CIA) with OIG. CIAs include unique provisions for internal oversight and price transparency. They also require companies to implement compliance measures, including risk assessment programs, executive clawback provisions and certifications related to the compliance of company executives and board members. ‘administration.

“These bribe programs hurt Medicare, Medicaid and patients,” said Gregory E. Demske, chief advisor to the HHS inspector general. “CIAs promote transparency and accountability by requiring companies to report pricing information to the OIG and by requiring individual certifications by key executives involved in pricing and contracting functions.”

“Protecting TRICARE, the health care system for the U.S. military and their dependents, is a top priority for the Department of Defense, Office of the Inspector General, Defense Criminal Investigation Service (DCIS)” said Special Agent in Charge Patrick J. Hegarty, DCIS. North East Field Office. “When pharmaceutical companies artificially inflate prices, they undermine the integrity of TRICARE and place an unnecessary financial burden on the program. The settlement agreements announced today are the result of a joint effort and demonstrate DCIS’s continued commitment to work with our law enforcement partners, DOJ Civil Frauds and the USAO-EDPA, to investigate on healthcare fraud. “

The Anti-Kickback Statute prohibits companies from receiving or making payments in exchange for arranging the sale or purchase of items such as drugs for which payment can be made by a federal health care program. health care. These provisions aim to ensure that the supply and price of health products are not compromised by inappropriate financial incentives. These regulations reflect the important role of the False Claims Act in ensuring that the United States is fully compensated when it is the victim of bribes paid to pursue anti-competitive behavior.

The three companies previously entered into deferred prosecution agreements with the antitrust division to resolve related criminal charges. Taro paid a criminal fine of $ 205.6 million and admitted to conspiring with two other generic drug makers to fix the prices of certain generic drugs. Sandoz paid a criminal fine of $ 195 million and admitted to conspiring with four other generic drug companies to fix the prices of certain generic drugs. Apotex paid a criminal fine of $ 24.1 million and admitted to conspiring to increase and maintain the price of pravastatin. The civil settlement payments announced today are in addition to the criminal penalties paid by businesses.

Today’s civil settlements are the third, fourth and fifth arising from this investigation and have been processed by the Commercial Litigation Division of the Civil Division (Fraud Section) and the United States Attorney’s Office for the eastern district of Pennsylvania with the support of the office of the inspector general of the department. Department of Health and Human Services, the Office of Program Integrity of the Defense Health Agency, DCIS and the Office of the Inspector General of the Department of Veterans Affairs.

Investigating and resolving these issues illustrates the government’s focus on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Advice and complaints from all sources regarding potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The cases were handled by lead trial attorneys Jennifer L. Cihon and Laurie A. Oberembt and Deputy US Prosecutors Landon Y. Jones III, Rebecca S. Melley and Anthony D. Scicchitano.

With the exception of the facts admitted in the deferred prosecution agreements, the claims resolved by civil settlements are only allegations and there has been no determination of liability.