Several months ago, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) paid a $315 million fine in a settlement in a lawsuit filed against it, which claimed that the company was inflating prices in the US. The company has now been required to pay an additional amount - $169 million - over similar charges.
The claimant said that Teva was a party in inflating drug prices in order to obtain higher reimbursements from government programs in the US, including Medicaid.
Teva was not the only company accused of inflating prices. The case began several years ago. The claimants alleged that Teva and other companies sold their generic drugs at discounts to retail chains in Texas, California, and Florida, but did not disclose these discounts to the insurance companies, resulting in the companies obtaining higher reimbursements than they should have.
The $169 million payment by Teva will be dividend among several parties. $100 million will go to US federal authorities, $51.4 million to the State of Texas, $14.1 million to the State of Florida, and $3.5 million to the State of California. The payments will end all claims and legal proceedings in the case.
Teva's share price rose 1% at the opening on Nasdaq today to $54.51, and rose 0.4% on the TASE to NIS 210.80.
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2010
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