A New Jersey-based pharmaceutical company has agreed to pay $25 million for allegedly engaging in a price-fixing scheme for a generic cholesterol drug.
“Illegal collaboration on the price or supply of drugs increases costs both to federal health care programs and beneficiaries,” said the Department of Justice’s (DOJ) Principal Deputy Assistant Attorney General Brian Boynton. “The department will use every tool at its disposal to prevent such conduct and to protect these taxpayer-funded programs from abuse.”
The DOJ alleged that between 2013 and 2015, Glenmark Pharmaceuticals Inc., in Mahwah, New Jersey, violated the federal Anti-Kickback Statute.
This statute prohibits companies from making or receiving payments in exchange for the purchase or sale of drugs funded by federal health care plans.
The statute was written to prevent “improper financial incentives” from compromising health care costs, the DOJ said.
Allegedly, the company manipulated the price and availability of its generic cholesterol drug called pravastatin.
“At a time when excessive drug costs are already imposing unprecedented burdens on our country’s vulnerable citizens, an illegal conspiracy to fix the prices of generic drugs is alarming,” said U.S. Attorney for the Eastern District of Pennsylvania Jacqueline Romero.
The DOJ said the agreement validates the importance of the False Claims Act, which holds liability over those who defraud government programs.
The DOJ alleged in the indictment that Glenmark conspired with competing pharmaceutical manufacturers to arrange for the sale of the cholesterol drug, which resulted in fraudulent claims submitted to federal health care programs such as Medicare, Medicaid, and TRICARE.
Special Agent in Charge Maureen Dixon said raising prices of generic medications not only makes it more difficult for others to get the prescription drugs they need, but it’s also illegal.
“Americans have the right to purchase generic drugs set by fair and open competition, not collusion,” she said.
Glenmark had previously pleaded guilty to conspiring with two other generic drug companies to fix the cost of the cholesterol drug for which it paid a criminal fine of $30 million.
The civil settlement marks the sixth in an ongoing DOJ investigation into generic drug manufacturers’ price fixing.
The Epoch Times contacted Glenmark Pharmaceuticals for comment.
