Generic Drug Pricing Fraud

Generic drug pricing fraud occurs when pharmaceutical manufacturers illegally collude to fix prices or pay kickbacks to inflate generic drug costs paid by Medicare and Medicaid. These schemes cost taxpayers billions and undermine fair competition.

Teva Pharmaceuticals, the largest U.S. generic drug manufacturer, agreed to pay $450 million in 2024 to resolve False Claims Act allegations involving two kickback schemes. The first involved paying Medicare patients’ copays for the MS drug Copaxone while steadily raising its price. Teva coordinated with copay assistance foundations to ensure donations covered Medicare patients’ copays—which Teva knew was prohibited by the Anti-Kickback Statute. The second scheme involved conspiring with other manufacturers to fix prices for pravastatin and other generics. Teva also paid a $225 million criminal penalty for the price-fixing conspiracy.

This case exposed the widespread use of copay assistance foundations as vehicles for illegal kickbacks—distorting patient decisions, thwarting competition, and bypassing federal healthcare protections. The DOJ coordinated criminal and civil enforcement against the same conduct, with Teva entering a deferred prosecution agreement and agreeing to cooperate with ongoing investigations. Combined, Teva paid $675 million in penalties. In separate price-fixing cases, Taro, Sandoz, and Apotex paid an additional $447.2 million, demonstrating the staggering scale of generic drug pricing fraud.