Glenmark pays $25M to resolve alleged False Claims Act liability for drug price-fixing
Mahwah, N.J.-based Glenmark recently 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 cholesterol drug manufactured by Glenmark, pravastatin.
“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.”
[Read more FDA grants Glenmark tentative approval for generic Enstilar]
“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.”
[Read more: Glenmark debuts Olopatadine Hydrochloride Ophthalmic Solution OTC]
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 to ensure that the United States is fully compensated when it is the 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 to conspiring with two other generic drug companies to fix prices on pravastatin. The civil settlement payment announced today is in addition to the criminal penalty paid by the company.
The civil settlement is the sixth resolution arising from the Justice Department’s investigation of price fixing by generic drug manufacturers and was handled by the Civil Division’s Commercial Litigation Branch, Fraud Section, and U.S. Attorney’s Office for the Eastern District of Pennsylvania, with support from HHS-OIG, the Defense Health Agency Program Integrity Office and DCIS.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).
Except for those facts admitted to by Glenmark in the deferred prosecution agreement, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.
View the settlement agreement here.