On Friday, several US subsidiaries of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) reached a settlement in principle in several civil lawsuits on drug prices. The lawsuits were filed by Ven-A-Care of the Florida Keys Inc. on behalf of the United States, Texas, Florida, and California under federal and state False Claims Acts.
Teva will report a one-time $315 million charge for the settlement in its financial report for the fourth quarter of 2009. This charge includes both the settlement in principle and a reserve for the remaining drug pricing lawsuits to which Teva is a party.
Teva is one of several pharmaceutical manufacturers accused of inflating drug prices reported by the manufacturers in about 15 states. The cases, which are pending in federal and state courts, generally allege that the prices reported by pharmaceutical companies caused governments to pay inflated reimbursements for drugs under Medicaid or other programs. Teva denies the allegations.
When the definitive settlements are reached and state and court are approved, the settlement will resolve a lawsuit relating to federal contributions to all state Medicaid programs and claims of Texas, Florida, and California relating to their Medicaid programs. The settlement will eliminate the majority of the alleged damages asserted against Teva in the various drug pricing litigations.
Teva's share fell 2% on Nasdaq on Friday to $56.76, giving a market cap of $50.01 billion. The share fell 1% in early trading on the TASE today to NIS 213.
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2010
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