Generic Drugs Investigation Targets Anticompetitive Schemes

The Division remains committed to rooting out illegal conduct that corrupts critical healthcare markets. That work is more important now than ever before.

In recent years, the Division has uncovered price-fixing, bid-rigging, and customer-allocation schemes in one of the most important markets for the health and wallets of American consumers: the generic drug industry. Indeed, nearly 90% of all prescriptions in the United States are filled with generic drugs.

To date, the investigation has resulted in charges against seven generic pharmaceutical companies and four senior executives for conspiring to fix prices, rig bids, and allocate customers for essential generic drugs relied on by millions of American consumers, including the elderly and vulnerable, to treat a range of diseases and conditions. Of the four executives charged, three have pleaded guilty. Of the seven companies, five have admitted to the charged conduct and entered into deferred prosecution agreements (DPAs) to resolve the charges, under which they collectively agreed to pay over $426 million in criminal penalties for collusion that affected over $1 billion of generic drug sales. Most recently, in July 2020, Taro Pharmaceuticals U.S.A., Inc. was charged for participating in two conspiracies to fix prices, rig bids, and allocate customers that impacted over $500 million in sales of generic drugs used to prevent and control seizures and treat bipolar disorder, pain and arthritis, and various skin conditions. The company entered into a DPA to resolve the charges under which it agreed to pay a $205.7 million criminal penalty—the highest ever for a domestic cartel.

The criminal cases are being prosecuted by attorneys in the Division’s Washington Criminal I and II sections and the Chicago Section, with assistance of the USPS Office of Inspector General, the Federal Bureau of Investigation’s Washington Field Office, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

The companies and executives that have resolved the charges have agreed to provide ongoing cooperation, including against two companies—Teva and Glenmark—and one executive currently awaiting trial.