By Jonathan Stempel and Nate Raymond
(Reuters) – The U.S. government sued Teva Pharmaceutical Industries Ltd <TEVA.TA> on Tuesday, accusing the drugmaker of causing the submission of false claims to Medicare as a result of kickbacks it paid for its multiple sclerosis drug Copaxone.
In a complaint filed with the U.S. district court in Boston, the U.S. Department of Justice said Teva violated the federal False Claims Act from 2006 to 2015 by paying two seemingly independent charitable foundations more than $300 million to cover Medicare co-payment obligations of Copaxone patients.
The government said Teva used the foundations as conduits to shield patients from a fourfold increase in Copaxone’s price, leading to hundreds of millions of dollars of false claims and a corresponding amount of revenue for the Israeli drugmaker.
Copaxone is one of Teva’s largest drugs, generating $435 million of revenue in North America alone from January to June.
Teva said it will vigorously defend itself against the allegations, saying the lawsuit “only seeks to further restrict patients’ access to important medicines and healthcare.”
According to the complaint, Teva would refer Copaxone patients to the specialty pharmacy Advanced Care Scripts Inc, which then arranged co-payment coverage from the foundations, the Chronic Disease Fund and The Assistance Fund.
The Justice Department said Teva’s conduct circumvented Congress’ intent that co-payments help keep drug prices down.
“Unbound by any market check on pricing due to its payment of illegal kickbacks, Teva left American taxpayers to shoulder the high prices that Teva set for Copaxone, while Teva reaped for itself the resulting profits,” the complaint said.
The lawsuit seeks triple damages.
(Reporting by Jonathan Stempel in New York and Nate Raymond in Boston; Editing by Steve Orlofsky and Dan Grebler)
