Taro Pharmaceuticals U.S.A. will pay a $205.7 million criminal penalty to resolve charges for conspiring to fix prices, allocate customers, and rig bids for generic drugs, the Department of Justice announced Thursday.

According to the DOJ’s charges, filed in the U.S. District Court for the Eastern District of Pennsylvania, Taro U.S.A. admitted to participating in two criminal antitrust conspiracies between March 2013 and until at least December 2015, each with a competing generic drug maker (Sandoz) and several executives, including former Taro U.S.A. Vice President of Sales and Marketing Ara Aprahamian.

The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charges against Taro U.S.A., under which the company admitted its sales affected by the charged conspiracies exceeded $500 million. According to the charge and DPA, Taro U.S.A. and its co-conspirators agreed to fix prices, allocate customers, and rig bids for numerous generic drugs, including medications used to prevent and control seizures and treat bipolar disorder, pain and arthritis, and various skin conditions.

The charges are “indicative of my Office’s ongoing efforts to investigate and charge companies and executives who fix the prices of generic pharmaceuticals,” said U.S. Attorney William McSwain. “We and our partners at the Antitrust Division and other federal law enforcement agencies remain heavily focused on price-fixing and illegal market allocation in generic drugs.”

This is the 10th case to be filed in the Antitrust Division’s ongoing investigation into the generic pharmaceutical industry. To date, five of the six companies charged—including Sandoz—admitted to their roles in antitrust conspiracies and resolved through DPAs, under which they’ve collectively agreed to pay over $426 million in criminal penalties.

Under the DPA, Taro U.S.A. has agreed to cooperate fully with the Antitrust Division’s ongoing criminal investigation. As part of the agreement, the parties will file a joint motion, subject to approval by the court, to defer for the term of the DPA any prosecution and trial of the charges filed against the defendant.

In addition, four executives have been charged for their roles in fixing prices of generic drugs. Aprahamian was indicted in February 2020 and is awaiting trial. The other three executives have pleaded guilty, including a former senior executive at Sandoz.

 

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal, enforcement, technology, and more.

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