/>iFederal Court Permits Investors to Resume Kickback Suit Against Teva
After a two-year long stay, on August 30, Judge Karen S. Marston of the US District Court for the Eastern District of Pennsylvania ruled that investors could resume their class action lawsuit against Teva Pharmaceuticals considering the ongoing negotiations between Teva and the US Department of Justice (DOJ) to settle a related kickback suit.
In August 2020, the DOJ brought an action in the US District Court of Massachusetts against Teva, claiming that it violated the Anti-Kickback Statute (AKS) by making payments to several charitable patient assistance programs for the multiple sclerosis drug, Copaxone, which in turn would be used only to cover copays for its drug. The DOJ alleged these donations were unlawful kickbacks and resulted in hundreds of millions of dollars in false claims to Medicare (DOJ Action). In September 2020, Halman Aldubi Provident and Pension Funds Ltd. commenced a related class action investor suit against Teva, contending that the company lied and failed to disclose these unlawful kickbacks and made misleading statements (Investor Action). In August 2022, Judge Marston initially granted a stay of the Investor Action because, among other things, the two lawsuits would cause a burden to Teva, the DOJ Action would narrow the issues to be resolved in the Investor Action, and the public interest would be best served by permitting the DOJ Action to “proceed smoothly and without distraction” from the suit brought by the investors.
Earlier this year, Teva notified the First Circuit Court of Appeals that it was engaged in settlement negotiations with the DOJ, which resulted in an abeyance of Teva’s interlocutory appeal in the DOJ Action. Following this notice, the investor-plaintiffs filed a motion to lift the stay on their case. On August 30, Judge Marston granted this motion, finding that “there is no real distraction” to the Investor Action any longer because of the settlement negotiations and the abeyance in the DOJ Action. The court held that there was not an undue burden on Teva because it was not litigating two cases anymore, the investors have an interest in proceeding expeditiously, discovery in the DOJ Action had already concluded, and the public has an interest in resolution of the investors’ class action lawsuit.
The cases are US v. Teva Pharmaceuticals USA Inc., et al., case number 23-1958, and Provident v. Teva Pharmaceuticals Industries Limited, et al., case number 20-cv-4660.
AFS previously reported on Teva’s settlement negotiations with the DOJ, which can be found here.
Pharmaceutical Manufacturer Settles FCA Allegations for $25 Million
On September 4, the DOJ announced that Glenmark Pharmaceuticals Inc. USA, a generic pharmaceutical manufacturer and distributor, agreed to settle allegations that it conspired to fix the price of a generic drug in violation of the False Claims Act (FCA) for $25 million.
According to the settlement agreement, from May 2013 through December 2015, Glenmark entered into a conspiracy with competing pharmaceutical companies to fix prices through arrangements on price, supply, and allocation of customers, which resulted in payments and the receipt of compensation in violation of the AKS. The alleged price-fixing scheme concerned pravastatin, a generic drug used to lower cholesterol, along with other generic drugs. In August 2023, Glenmark entered in a deferred prosecution agreement with the DOJ’s Antitrust Division to resolve related criminal charges and had agreed to pay a penalty of $30 million based on its ability to pay. The $25 million settlement announced on September 4 is in addition to the penalty that Glenmark agreed to pay last year.
The press release can be found here.
Virginia Man Pleads Guilty to Role in Nearly $1 Million Health Care Fraud Scheme
On September 3, the US Attorney for the Eastern District of Virginia announced that Jamahl Renelle Burch pleaded guilty to health care fraud, conspiracy to commit health care fraud, and aggravated identity theft in connection with a health care fraud scheme that resulted in nearly $1 million in losses.
According to court documents, Burch identified and selected Medicaid recipients to sign up for Medicaid reimbursed personal care or respite care services from May 2015 through November 2023. Burch, along with his co-conspirators, executed agreements that designated individuals as personal care attendants (PCAs) for the recipients and then used the personal identifying information of the recipients and purported PCAs to create accounts and submit fraudulent timesheets to Medicaid, which showed thousands of hours of care and services. Burch and his co-conspirators allegedly approved the timesheets attesting that the care and services were provided despite knowing that they were not. According to the government, the scheme resulted in $936,950.70 in fraudulent reimbursements for care and services that never occurred.
Burch is scheduled to be sentenced on January 9, 2025, and faces up to 10 years in prison for the health care fraud counts.
The press release can be found here.
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Heather M. Zimmer contributed to this post
