Glenmark Pharma, Teva settle drug pricing cases with US Dept of Justice

Mumbai-based drugmaker Glenmark Pharmaceuticals said that it has entered into a pact with the US Department of Justice, Antitrust Division (DOJ) to resolve all of its court proceedings related to pricing of a cholesterol drug pravastatin, and would be paying $30 mn in six installments.

The company said in an exchange notification that it has entered into an agreement with DoJ to resolve all of its court proceedings with the DoJ involving historical pricing practices by ‘former employees’ relating to generic drug pravastatin between 2013 and 2015. Glenmark stock dipped almost 2 percent on the BSE on Tuesday.

Glenmark Pharmaceuticals Inc, USA, a wholly owned subsidiary of Glenmark Pharmaceuticals, has entered into a three-year Deferred Prosecution Agreement including payment of $30 mn, payable in six installments, and if the company adheres to the terms of the agreement, the DoJ will dismiss the pending Superseding Indictment.

“Glenmark is committed to being a socially and ethically responsible company and has devoted considerable resources to strengthen our compliance practices,” Glenmark President Sanjeev

Krishan said in a statement.

Bloomberg reported that along with Glenmark Pharma, Teva Pharmaceutical Industries too will pay multimillion dollar fines and make divestitures as part of the settlement with the DoJ over price-fixing of commonly used drugs. Teva will pay $225 mn, the agency said.

“Both companies also agreed to sell off their business lines that make a widely used cholesterol drug, pravastatin. Under the agreement, federal prosecutors will dismiss the charges in three years if the companies abide by the settlement terms,” Bloomberg report said.

The US unit of Teva, the world’s largest generic-drug maker, was indicted in August 2020 for allegedly fixing prices of medications that treat cholesterol, seizures, pain, skin conditions, blood clots, brain cancer, cystic fibrosis, arthritis and hypertension. Glenmark’s US unit was charged in June 2020. 

Under the terms of the deferred prosecution agreement announced Monday, Teva acknowledged participating in a conspiracy that affected the prices on three medications: the cholesterol drug pravastatin; clotrimazole, commonly used on skin infections; and tobramycin, often prescribed to treat eye infections and cystic fibrosis. Glenmark admitted to conspiring

to fix the price of pravastatin.

Teva will make a $50 million drug donation to humanitarian organizations that help Americans in need.  Five other companies have settled charges and agreed to pay a total of $426 million in criminal penalties as a result of the Justice Department probe.