Three generic drugs manufacturers to pay $447.2 million to settle price-fixing conspiracy charges

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Three generic drugs manufacturers accused of price-fixing conspiracy to stifle or eliminate competition agreed to settle with the United States government.

On Friday, the U.S. Department of Justice (DOJ) announced that Taro Pharmaceuticals USA, Inc., Sandoz Inc., and Apotex Corporation agreed to pay a total of $447.2 million to settle the criminal information filed against them.

The United States government alleged that three pharmaceutical companies conspired to fix the prices of various generic drugs. As a result, patients and federal health care programs such as Medicare, Medicaid, and TRICARE paid higher prices for the implicated generic drugs such as etodolac, a nonsteroidal anti-inflammatory drug used to treat pain and arthritis; benazepril HCTZ, used to treat hypertension, and pravastatin, a drug used to treat high cholesterol and triglyceride levels.

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Taro Pharmaceuticals USA, Sandoz, and Apotex allegedly paid and received compensations through arrangements on price, supply, and allocation of customers with other generic drugs manufacturers between 2013 and 2015.

The federal government charged the three generic drugs manufacturer with violating the False Claims Act, the Sherman Antitrust Act, and the Anti-Kickback Statute.

Settlement Agreement with Taro Pharmaceuticals USA, Sandoz, and Apotex

Taro Pharmaceuticals USA signed a settlement agreement with the United States government through the Justice Department on September 30, 2021.

Under the settlement agreement, the New York-based generics drug manufacturer agreed to pay $213.2 million.

Taro Pharmaceuticals USA also executed a Deferred Prosecution Agreement (DPA) with the DOJ’s Antitrust Division in connection with the two-count Criminal Information filed against it.

Sandoz signed a settlement agreement with the United States through the DOJ on September 28. The generics drugs manufacturer also executed a DPA with the department’s Antitrust Division.

Under the settlement agreement, Sandoz will pay $185 million to resolve the four-count Criminal Information filed against it.

Meanwhile, Apotex entered into a settlement agreement September 30, 2021. The  Florida-based generic drugs manufacturer agreed to pay $49 million to resolve the one-count Criminal Information filed against it.

Apotex also executed a DPA with the DOJ’s Antitrust Division.

The Criminal Information against Taro Pharmaceuticals USA, Sandoz, and Apotex were filed in the United States District Court for the Eastern District of Pennsylvania. The settlement agreements do not mean the generic drugs manufacturers admitted liability nor the U.S. government conceded that its allegations are not well-founded.

In a statement, the DOJ Civil Division’s Acting Assistant Attorney general Brian Boynton said, “Illegal collaboration on the price or supply of drugs increases costs both to federal health care programs and beneficiaries. The department will use every tool at its disposal to prevent such conduct and to protect these taxpayer-funded programs.”

On the other hand, Acting U.S. Attorney for the Eastern District of Pennsylvania Jennifer Arbittier Williams said, “These civil settlements are another achievement in my office’s efforts to hold generic drug companies accountable for the consequences arising from price-fixing schemes, including the harm to federal health care programs. We will continue to aggressively pursue these violations of the Anti-Kickback Statute and the False Claims Act and obtain significant recoveries.”

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