Teva Copaxone Kickback Suit Overcomes Motion to Dismiss

On September 9, 2021, the U.S. District Court for the District of Massachusetts mostly denied a motion to dismiss a DOJ action alleging that Teva willfully violated the Anti-Kickback statute through copayment assistance donations that ended up exclusively subsidizing prescriptions for its multiple sclerosis drug, Copaxone. The court found that the government had alleged in sufficient detail a scheme by which Teva practically guaranteed that its own donations would result in the submission of Medicare claims for Copaxone. By working with the charities in question, Teva was able to provide donations in the exact amount necessary to cover any outstanding requests for assistance for Copaxone, with assurances that the Copaxone patients would be first in line as soon as the money came in. The DOJ’s claim for unjust enrichment was dismissed however, as an adequate legal remedy already existed under the FCA.

False Claim Act Complaint Filed in August 2020

DOJ filed a False Claims Act complaint against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. on August 18, 2020, alleging violations of the Anti-Kickback Statute by secretly paying Medicare co-pays for Copaxone. At its peak, Copaxone had over $4 billion per year in global sales.  Medicaid paid more than $1.1 billion a year in 2015 for Copaxone. The government is asking for Teva to repay all revenue received from the alleged scheme.

In the case, the DOJ alleges that from 2007 through 2015 Teva funneled money to two purportedly independent patient assistance charities, The Patient Assistance Fund and the Chronic Disease Fund, with the intent and understanding that the two charities would use those funds to cover Medicare co-pays for Copaxone. During that time, Teva raised the price of Copaxone treatment from $17,000 a year to $73,000 a year. “Teva left taxpayers to shoulder the high prices that Teva set for Copaxone, while Teva reaped for itself the resulting profits”, according to the original government complaint.

Prior Settlements

The Patience Assistance Fund paid $4 million in November 2019 to avoid similar accusations. The Chronic Disease Fund paid $2 million in October of 2019 to settle allegations of acting as a kickback conduit for drugmakers. Advanced Care Scripts Inc. paid $3.5 million in August 2020 to settle claims regarding its involvement in the coordination of Teva’s actions.

More Cases in Massachusetts

This case is one of a number of actions and investigations by the U.S. Attorney’s Office for the District of Massachusetts relating to abuse of patient assistance charities by pharmaceutical manufacturers. This case stands out because of Copaxone’s high level of sales and high costs (approximately $7,000 per month). Humana has filed a complaint based on similar allegations. We are actively monitoring the development of these cases and any forthcoming actions related to the abuse of copayment assistance charities.

False Claim Act Law Firm

Established in 1993, Schneider Wallace Cottrell Konecky LLP is a leading pay-for-delay and class action litigation law firm that handles complex antitrust cases nationwide. Our attorneys represent companies that have lost profits and opportunities through anticompetitive behavior as well as consumers and third party payors who paid higher prices or suffered other harm as a result of unfair corporate practices.

United States v. Teva Pharmaceuticals, USA, Inc., et al., No. 20-cv-11548 (D. Mass)