DOJ accuses drugmaker Teva of illegal kickbacks to inflate prices
The DOJ filed a federal lawsuit against the pharmaceutical company
Fox Business Flash top headlines are here. Check out what's clicking on FoxBusiness.com.
The Justice Department filed a False Claims Act lawsuit against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc., accusing them of violating the Anti-Kickback Statute by illegally paying Medicare copayments for multiple sclerosis treatment Copaxone through foundations that were purported to be independent.
Federal law forbids pharmaceutical companies from offering or making payments to customers as incentives to use their products. The DOJ claims that by covering Medicare patients' copayments, Teva was able to get patients to use Copaxone while significantly raising the price.
MITT ROMNEY RAISES ALARM ABOUT STATE OF SOCIAL SECURITY AND MEDICARE TRUST FUNDS
"Drug manufacturers that offer kickbacks in order to boost profits – as alleged in this case – drive up health care costs for everyone and undermine the public’s trust in the health care system," Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services' Office of Inspector General said in a statement. "Our agency, working closely with our law enforcement partners, will continue to thoroughly investigate such corrosive schemes."
FOX Business reached out to Teva for comment but it did not immediately respond.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TEVA | TEVA PHARMACEUTICAL INDUSTRIES LTD. | 16.75 | -0.20 | -1.15% |
The complaint, filed in Massachusetts federal court, alleges that from 2007 through 2015 Teva made payments to The Assistance Fund and Chronic Disease Fund with the understanding that the foundations would then cover the copayments for Copaxone patients, who were referred by Advanced Care Scripts Inc., a pharmacy that Teva used for referring patients with Medicare copayments.
WHAT IS MEDICARE, AND HOW DO YOU GET IT?
The DOJ claims that during that same time period, Teva increased the price of a year's supply of Copaxone from roughly $17,000 to more than $73,000.
"The department is committed to stopping pharmaceutical companies from using foundations as conduits to funnel kickbacks to Medicare patients, and to prop up excessive drug costs at the expense of the American taxpayers," said Acting Assistant Attorney General Ethan P. Davis of the Department of Justice’s Civil Division. "We will continue to root out these unlawful kickback arrangements that undermine the integrity of federal health care programs."