Generic Drug Maker to Admit to Fixing Prices for Cholesterol Medication

WASHINGTON — A top generic drug maker will admit that it fixed prices of a popular cholesterol drug and agree to pay more than $24 million, as part of the Justice Department’s broad crackdown on price fixing and bid rigging in the generic drug market, according to people familiar with the settlement talks.

Apotex is expected to settle charges with the Justice Department as early as Thursday that it worked with other drug companies to inflate the price of its cholesterol drug, pravastatin, from 2013 to 2015, according to the people familiar with the talks, who spoke on condition of anonymity because they were not authorized to discuss the documents before they were filed.

Apotex did not immediately respond to a request for comment. The Justice Department declined to comment.

The Justice Department’s investigation into generic drug prices — which should remain low and stable — is one of several inquiries into significant price increases that have driven up health costs for consumers and government programs like Medicare.

Congress has been investigating the rising costs of several popular generic drugs over the past several years and state attorneys general have subpoenaed drug makers. President Trump and Democratic politicians have regularly called for costs to be constrained.

Last year, 44 states sued more than a dozen generic drug makers and accused them of conspiring to inflate prices by as much as 1000 percent on medications for conditions including depression, cancer and asthma. The states have alleged that the companies coordinated pricing with one another during meals, parties and golf outings to avoid leaving a paper trail.

As part of its agreement with the Justice Department, Apotex plans to cooperate with the government’s broader investigation into generic drug pricing and implement a program to detect and prevent future antitrust violations.

The Justice Department will defer any prosecution for three years and drop the price fixing charge if Apotex fulfills its commitments to the government. It will not impose a monitor on the company to ensure compliance, the people familiar with the settlement said.

The deferred prosecution takes a significant burden off Apotex — if the Justice Department had taken the company to court and secured a conviction, Apotex would have be banned from all federal health care programs for at least five years.

Teva Pharmaceuticals, one of the world’s largest drugmakers, and Glenmark Pharmaceuticals are also being sued by the states alongside Apotex over the price of pravastatin, which rose 573 percent in 2013, according to the results of the congressional inquiry and documents filed as part of the states’ lawsuit.

Teva, Apotex, Glenmark and three other generic drug makers control nearly all of the pravastatin market, and Teva alone controls for more than half of it, according to the lawsuit.

Other drug makers have been in discussions with the Justice Department over allegations that they conspired to inflate the price of pravastatin, but it is unclear whether they will settle or push the department to charge them, according to a person familiar with those talks.

Apotex still faces numerous civil actions related to price fixing.

Over the past year, the Justice Department has secured guilty pleas and settlement agreements from three generic drugmakers and three pharmaceutical company executives as part of its price fixing investigation. A fourth executive is awaiting trial.

In March, the generic drugmaker Sandoz pleaded guilty to four counts of bid rigging and price fixing as part of a deferred prosecution agreement. It agreed to pay a $195 million penalty, the largest ever fine in a U.S. antitrust case.

Rising, which filed for bankruptcy, agreed to pay about $2 million in penalties and damages. Heritage agreed to pay more than $7 million in penalties and damages as part of its settlement with the government.

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