• Staff

Justice Department Sues Teva for Pharmaceutical Kickback Scheme

Updated: Aug 28, 2020

The US Department of Justice has lodged a False Claims Act complaint against Teva Pharmaceuticals USA Inc. The department claimed that the corporation unlawfully compensated the Medicare co-payment for Copaxone, an MS (Multiple Sclerosis) drugs. This was achieved by supposedly autonomous foundations used as gateways by the corporations in breach of the Anti-Kickback laws. The suit also involves Teva Neuroscience Inc.

The lawsuit, lodged in Boston federal district court, revealed details of Teva unlawfully paying over $300 million to two autonomous charity organizations for the past nine years (2006-2015). This was an arrangement to protect Copaxone patients' co-payments, protecting them from massively increasing the cost of Copaxone to $73,326 per annum. This contributed to hundreds of millions in false claims and a corresponding amount of profits for the corporation. This move was made to subvert the aim of Congress, who are interested in ensuring that co-payments would hopefully maintain down healthcare costs. The lawsuit also disclosed that Teva directed Copaxone patients to Advanced Care Scripts Inc. The specialty pharmacy, located in Florida, provided co-payment compensation from the charities created by Teva.

Teva, an Israeli drugmaker company, was established in 1901. The healthcare company offers generic and technological innovations to healthcare providers and patients. Teva's portfolio has a record of approximately 3,500 services and products. This places the firm in the world's biggest pharmaceutical companies. Each day close to 200 million individuals in 60 nations takes advantage of one of Teva's unique medications.

In its defense, Teva noted that it would protect itself vigorously. According to the company, the lawsuit is only a move aimed at limiting patients from accessing quality medicines and healthcare services. Copaxone is one of Teva's most significant drugs. It has successfully generated a revenue of $435 million in North America alone within six months.

Ethan P. Davis, the acting Assistant Attorney General of the Civil Division of the DOJ, said the DOJ is "committed to stopping pharmaceutical companies" who use foundations as methods to funnel kickbacks to patients. Davis said the DOJ would attempt to eliminate all kinds of illegitimate kickback schemes that "undermine the integrity of federal healthcare" systems.

The lawsuit is the newest in a government investigation of financial assistance by drugmakers to hospitals for medical help, resulting in over $920 million in damages. Drugmakers can't underwrite co-payments for Medicare-enrolled patients, covering citizens above 65 years old but can make donations to independent charities that offer co-payment help.