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U.S. Govt. Sues Teva Over Alleged Kickbacks For Multiple Sclerosis Drug

Teva Pharmaceutical Industries Ltd. (TEVA) has been sued by the U.S. Department of Justice under the Federal False Claims Act.

According to the lawsuit, Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. illegally paid the Medicare co-pays for their multiple sclerosis product, Copaxone, through purportedly independent foundations that the companies used as conduits in violation of the Anti-Kickback Statute.

The lawsuit claims that Teva paid two third-party foundations more than $300 million to cover Medicare co-payment obligations of Copaxone patients.

From 2007 to 2015, Teva raised the price of Copaxone from about $17,000 a year to more than $73,000.

"The department is committed to stopping pharmaceutical companies from using foundations as conduits to funnel kickbacks to Medicare patients, and to prop up excessive drug costs at the expense of the American taxpayers," said Acting Assistant Attorney General Ethan Davis of the Department of Justice's Civil Division. "We will continue to root out these unlawful kickback arrangements that undermine the integrity of federal health care programs."

"The government's complaint today alleges that Teva used ostensibly independent charitable foundations as vehicles to pay hundreds of millions of dollars in kickbacks, all while raising the price of its drug, Copaxone, at a rate over 19 times the rate of inflation," said Andrew Lelling, United States Attorney for the District of Massachusetts. "Teva's alleged kickbacks undermined the Medicare program's co-pay structure, which Congress created as a safeguard against inflated drug prices."

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