A generic pharmaceutical manufacturer, Glenmark Pharmaceuticals Inc. USA (Glenmark), located in Mahwah, New Jersey, has agreed to pay $25 million, based on its ability to pay, to resolve its alleged liability under the False Claims Act for conspiring to fix the price of a generic drug.
The government alleged that between 2013 and 2015, Glenmark paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers for a generic drug manufactured by Glenmark, pravastatin, which is widely used to treat high cholesterol and triglyceride levels.
“Illegal collaboration on the price or supply of drugs increases costs both to federal health care programs and beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will use every tool at its disposal to prevent such conduct and to protect these taxpayer-funded programs from abuse.”
“At a time when excessive drug costs are already imposing unprecedented burdens on our country’s vulnerable citizens, an illegal conspiracy to fix the prices of generic drugs is alarming,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “My office is proud to work with the rest of the department and our investigative partners to hold companies accountable when they illegally inflate prices on drugs used for the health and well-being of our citizens.”
“Conspiring to raise prices on generic medications is illegal and could prevent patients from being able to afford their needed prescription drugs. Americans have the right to purchase generic drugs set by fair and open competition, not collusion,” said Special Agent in Charge Maureen R. Dixon of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Philadelphia Regional Office. “HHS-OIG will continue to work with our law enforcement partners to investigate allegations of health care fraud that put the public and the Medicare program at risk.”
“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General, seeks to protect the integrity of TRICARE, the healthcare system for U.S. military members and their dependents,” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “When pharmaceutical corporations artificially inflate prices, they place an unnecessary financial burden on the TRICARE program. The settlement agreement announced today demonstrates our commitment to partner with investigative agencies, the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania to combat healthcare fraud.”
The Anti-Kickback Statute prohibits companies from receiving or making payments in return for arranging the sale or purchase of items such as drugs for which payment may be made by a federal health care program. These provisions are designed to ensure that the supply and price of health care items are not compromised by improper financial incentives. This settlement reflects the important role of the False Claims Act in ensuring that the United States is fully compensated when it is a victim of kickbacks paid to further anticompetitive conduct.
Glenmark previously entered into a deferred prosecution agreement with the Justice Department’s Antitrust Division to resolve related criminal charges. Glenmark paid a criminal penalty of $30 million based on its ability to pay and admitted conspiring with two other generic drug companies to fix prices on pravastatin. The civil settlement payment announced today is in addition to this criminal penalty.
The civil settlement is part of ongoing efforts by authorities against price fixing by generic drug manufacturers and was handled by several entities within the Justice Department along with support from HHS-OIG, DCIS, among others.
Senior Trial Counsel Jennifer L. Cihon and Senior Litigation Counsel Laurie A. Oberembt from Justice Department’s Civil Division along with Assistant U.S. Attorneys Landon Y. Jones III, Rebecca S. Melley, and Anthony D. Scicchitano managed this case.
Except for those facts admitted by Glenmark in their deferred prosecution agreement, all claims resolved by this civil settlement remain allegations without any determination of liability.