Teva Prepared to Fight Charges in Generics Probe If Talks Fail
Teva Prepared to Fight Charges in Generics Probe If Talks Fail
(Bloomberg) -- Teva Pharmaceutical Industries Ltd. is prepared to fight allegations that it engaged in criminal price-fixing if U.S. prosecutors decide to charge the generic-drug giant as part of an industry-wide investigation, its top executive said.
“We did not participate in organized price-fixing,” Chief Executive Officer Kare Schultz said in an interview on Wednesday. “There is no evidence of anything like that.”
The U.S. Department of Justice has spent years investigating allegations that several generic-drug makers cooperated on setting prices of numerous medications. The probe has recently come to a head, with prosecutors agreeing to a total of $426 million in settlements with five companies. A sixth company, India’s Glenmark Pharmaceuticals Ltd., was charged and pleaded not guilty.
Schultz said Teva, which is based in Israel, remains in active discussions with the Justice Department but won’t agree to an accord that could limit the company’s ability to sell its products in the U.S. during the coronavirus pandemic.
“While we’re of course okay with a settlement,” Schultz said, “doing one that would cripple our abilities to supply the U.S. with pharmaceuticals at this time, we don’t think it makes sense when the company has done nothing.”
The Justice Department’s antitrust division, which is conducting the investigation, has offered Teva a settlement known as a deferred prosecution agreement, which would require the company to pay a criminal penalty and admit wrongdoing, according to a person familiar with the matter.
Teva has told the government it will only accept a nonprosecution agreement that doesn’t require the drugmaker to admit wrongdoing, and has appealed to the Justice Department’s senior leadership, the person said.
A spokesperson for the Justice Department declined to comment. A Teva spokesperson declined to comment in response to questions regarding discussions of the structure of a potential agreement with prosecutors.
Schultz said talks with U.S. prosecutors have been delayed because of the pandemic.
“We would like to resolve this together in a positive way,” Schultz said on Wednesday during a conference call with investors. “We don’t know whether this will be possible.”
Civil Lawsuits
Teva and other generic drugmakers are also facing civil lawsuits filed by state attorneys general and plaintiffs accusing them of a conspiracy to divide up customers among themselves and increase the prices of medicines. Schultz said Teva was also in active discussions with those leading the civil suits.
Schulz said he has told those involved in the criminal investigation and civil litigation that certain outcomes have consequences on drug supplies amid the pandemic. Thus far, Teva’s supply chain has been “extraordinarily resilient in this situation,” he said in the interview.
During the conference call, investors asked about Teva’s exposure on the price-fixing cases as well as its alleged role in the opioid epidemic. Schultz said the liabilities remain difficult to model, though Teva will do its best to avoid “insurmountable financial damage.”
In recent years, Teva has grappled with a significant debt load. In order to ease its $26.3 billion in debt, Teva’s top executives have been tasked with generating cash, cutting costs, launching new products and refinancing. Limiting its legal liabilities will be critical to those efforts.
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