Sixth Pharmaceutical Company Charged In Ongoing Criminal Antitrust Investigation
Fifth Company to Admit It Fixed Prices of Generic Drugs
Taro Pharmaceuticals U.S.A., Inc. (Taro U.S.A.) has been charged for conspiring to fix prices, allocate customers, and rig bids for generic drugs, the Department of Justice announced today.
A two-count felony charge was filed today in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia, charging Taro U.S.A. with participating in two criminal antitrust conspiracies, each with a competing manufacturer of generic drugs and various executives.
The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charges against Taro U.S.A., under which the company agreed to pay a $205,653,218 criminal penalty and admitted that its sales affected by the charged conspiracies exceeded $500 million. 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, which is 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.
“Taro Pharmaceuticals U.S.A.’s unlawful conspiracies to raise the prices of critical drugs robbed consumers at pharmacy counters across America,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Today’s resolution marks another important step toward ensuring that competitively priced generic drugs are available to the millions of American consumers who rely on them.”
“During these difficult times, it is more important than ever that our pharmaceutical companies conduct business with the well-being of the consumer in mind,” said Acting Special Agent in Charge Steven Stuller, U.S. Postal Service Office of Inspector General. “When generic drug companies conspire to artificially increase prices, they do so to the detriment of many who depend on these medications to maintain good health. Along with the Department of Justice Antitrust Division and our partners at the Federal Bureau of Investigation, the USPS Office of Inspector General will remain committed to investigating those who would engage in this type of harmful conduct.”
“Today’s announcement demonstrates the FBI’s commitment to working with our partners to combat price-fixing and antitrust violations that ultimately harm the American public,” said Timothy R. Slater, Assistant Director in Charge of the FBI’s Washington Field Office. “We will continue to pursue these investigations to call attention to this criminal activity in order to ultimately ensure a competitive market and access to generic drugs.”
“The charges filed today in the U.S. Court for the Eastern District of Pennsylvania 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 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. These charges and the related deferred prosecution agreement, subject to approval by the court, are yet another important accomplishment in that area.”
In the deferred prosecution agreement, Taro U.S.A. admitted to participating in two charged conspiracies between 2013 and 2015. Specifically, Count One charges Taro U.S.A. for its role in a conspiracy with Sandoz Inc., former Taro U.S.A. Vice President of Sales and Marketing Ara Aprahamian, and other individuals, from at least as early as March 2013 and continuing until at least December 2015. Count Two charges Taro U.S.A. for its role in a second conspiracy with a generic drug company based in Pennsylvania and other individuals, from at least as early as May 2013 and continuing until at least December 2015. 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.
This is the tenth 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 Taro U.S.A.’s co-conspirator Sandoz Inc.—have 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. In addition, four executives have been charged for their roles in fixing prices of generic drugs. Former Taro U.S.A. executive Ara Aprahamian was indicted in February 2020 and is awaiting trial. The other three executives have pleaded guilty, including a former senior executive at Sandoz Inc.
The charged offense carries a statutory maximum penalty of a $100 million fine per count for corporations, and the maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million.
This case is the result of an ongoing federal antitrust investigation into price fixing, market allocation, bid rigging, and other anticompetitive conduct in the generic pharmaceutical industry, which is being conducted by the Antitrust Division with the assistance of the United States Postal Service Office of Inspector General, the FBI’s Washington and Philadelphia Field Offices, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Anyone with information on price fixing, market allocation, bid rigging, or other anticompetitive conduct related to the pharmaceutical industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.