Generic Drug Company Pays $24.1M to Resolve Antitrust Violations

The Department of Justice announced that Apotex Corp, a generic pharmaceutical company, agreed to pay a $24.1 million criminal penalty for the role it played in antitrust violations from May 2013 to December 2015.

According to the one-count felony charge, the Florida-based pharmaceutical company and other generic drug companies agreed to raise and maintain the price of pravastatin, a drug commonly prescribed as cholesterol medication that lowers the risk of heart disease and stroke. 

“Now, more than ever, we recognize and appreciate the importance of life-saving medications,” Makan Delrahim, assistant attorney general of the Department of Justice Antitrust Division, said in the announcement. “When the makers of those medications conspire to raise prices for profit, the most vulnerable among us suffer.  That’s why we at the Antitrust Division are committed to pursuing the prosecution of antitrust crimes by the generic pharmaceutical industry.”

Apotex communicated with competitors about the price increase and refrained from submitting competitive bids to customers that previously purchased pravastatin from a competing company.  

Under the deferred prosecution agreement (DPA), the company agreed to pay the multi-million-dollar criminal penalty and cooperate fully with the Antitrust Division’s ongoing criminal investigation.  

The parties will file a joint motion, which is subject to approval by the court, to defer any prosecution and trial of the charges filed against the defendant for the term of the DPA.

“During these difficult times, it is more important than ever that our pharmaceutical companies conduct business with the well-being of the consumer in mind,” said Scott Pierce, special agent in charge US postal service office of inspector general.  

“When generic drug companies conspire to fix prices and rig bids, they do so to the detriment of many who depend on these medications to maintain good health.  Along with the Department of Justice Antitrust Division and our partners at the Federal Bureau of Investigation, the USPS Office of Inspector General will remain committed to investigating those who would engage in this type of harmful conduct.”

Apotex is the fourth company to be charged in connection with antitrust violations in the generic pharmaceutical industry.  Four individuals have also been charged. Three entered guilty pleas and the fourth is awaiting trial, the DOJ noted.

“Compromising the health and welfare of innocent people by artificially inflating the price of a much needed medication is not only morally wrong, but illegal,” said William M. McSwain, US attorney for the Eastern District of Pennsylvania.  

“Preying on the public in this manner for the sake of financial gain is something that must be rooted out of the pharmaceutical industry.  We will continue to hold accountable any company that engages in this type of conduct.”

The maximum penalty for these violations is $100 million fine per count for corporations. This may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million, the DOJ said.

“Today’s announcement demonstrates that the FBI is dedicated to enforcing the law and investigating those who choose to collude at the expense of innocent Americans.  The public should not have to pay a higher price for necessary medications because of corporate greed,” said Timothy R. Slater, assistant director in charge of the FBI’s Washington Field Office.  

“During these uncertain times, we know that access to life-saving medication is of the utmost importance.  The FBI, along with our partners, are focused on investigating and bringing those responsible to justice, on behalf of the American public.”