Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Glenmark Pharmaceuticals pays $25M to resolve allegations of generic drug price-fixing, (Sep 5, 2024)

By Susan L. Smith, JD, MA

Agreement resolves allegations that drug maker had paid and received compensation prohibited by the AKS through arrangements with other generic drug companies to fix the price of a generic drug.

The Department of Justice (DOJ) has entered into a Settlement Agreement (Agreement) on behalf of the HHS Office of Inspector General (OIG) and the Defense Health Agency (DHA) and Glenmark Pharmaceuticals Inc., USA (Glenmark) to resolve Glenmark’s alleged liability under the False Claims Act (FCA) for conspiring to fix the price of prarvastatin and other generic drugs. The DOJ alleged that, between 2013 and 2015, the drug maker had paid and received compensation prohibited by the Anti-Kickback Statute (AKS) through arrangements with other pharmaceutical manufacturers on price, supply, and allocation of customers for pravastatin, a generic drug manufactured by Glenmark. Glenmark agreed to pay $25 million, based on its ability to pay, to resolve the liability for conspiring to fix the price of a generic drug. Glenmark agreed to cooperate fully and truthfully with the U.S.’ investigation of individuals and entities not released in the Agreement. The civil settlement is the sixth resolution arising from the DOJ’s investigation of price fixing by generic drug manufacturers (Settlement Agreement, U.S. v. Glenmark Pharmaceuticals Inc. USA, 20-cr-200-RBS (E.D. Pa. Aug. 30, 2024)).

Background. Glenmark previously entered into a deferred prosecution agreement with the DOJ’s Antitrust Division to resolve related criminal charges. The indictment charged Glenmark with conspiring with Teva Pharmaceuticals USA, Inc., Apotex Corp., and others to increase and maintain the price of pravastatin and other generic drugs sold in the U.S. from May 2013 until at least December 2015, in violation of the Sherman Antitrust Act. Glenmark paid a criminal penalty of $30 million and admitted to conspiring with the two other generic drug companies to fix prices on pravastatin. The DOJ noted that the civil settlement payment is in addition to the criminal penalty paid by the company.

Covered Conduct. The U.S. contends that it has certain civil claims against Glenmark arising from Glenmark’s alleged conspiracy with competing pharmaceutical distributors and/or manufacturers to fix prices and/or allocate markets that resulted in payment and receipt of remuneration from May 1, 2013, through December 31, 2015, in return for arranging for the sale of pravastatin in violation of the AKS. The DOJ asserts that Glenmark submitted or caused to be submitted claims for payment to the Medicare Program, the Medicaid Program, and the TRICARE program during the same time period.

Settlement terms. Glenmark will pay to the United States 25 million dollars with interest on the Settlement Amount at a rate of 4.25 percent per annum from May 28, 2024, by electronic funds transfer in accordance with the payment schedule. The Settlement Amount and interest on the Settlement Amount constitute restitution. Upon the receipt of the Settlement Amount, plus interest due, the U.S. will release Glenmark from any civil or administrative monetary claim it has for the Covered Conduct under the FCA; the Civil Monetary Penalties Law; the Program Fraud Civil Remedies Act, or common law theories of payment by mistake, unjust enrichment, and fraud. The releases are subject to U.S. reserved claims and issues related to the disclosure of assets, default, and bankruptcy as described in the Agreement. If Glenmark fails to pay the Settlement Amount as scheduled it will be in default of its payment obligations.

Glenmark released the U.S. from any claims it has asserted related to the Cover Conduct or the U.S.’ investigation or prosecution waived and will not assert any defenses it may have to any criminal prosecution or administrative action related to the Covered Conduct. The Agreement bars a remedy sought in a criminal prosecution or administrative action. In addition, Glenmark agrees to follow the requirements related to the treatment of future and previously submitted unallowable costs for government contracting purposes and under Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefit Program. Furthermore, Glemark will not seek payment for any of the health care billings covered in the Agreement from any health care beneficiaries or other payors based upon the claims defined as Covered Conduct.

News: Antitrust