U.S. Attorney Puts Teva's Marketing Of Drugs Under Scrutiny
Federal prosecutors in New York are investigating Teva’s sales and marketing practices for its drugs Copaxone and Azilect. Possible civil violations of the federal False Claims Act are being looked into, the company said. In its annual report with the U.S. Securities and Exchange Commission, Teva said it received a civil investigative demand from the U.S. Attorney in Manhattan. The demand asked for relevant documents and information regarding sales of the two drugs from 2006 up to the present.
Copaxone (glatiramer acetate injection) is Teva’s best-seller. The drug had sales of $4.3 billion last year. Copaxone is indicated for the treatment of patients with relapsing forms of multiple sclerosis (MS). Azilect (rasagiline tablets) is indicated in patients with Parkinson’s disease. The drug targets signs and symptoms of PD, both as an initial therapy and later as adjunctive treatment to levodopa. Azilect had sales of $493 million last year.
Teva is the world’s biggest generic drug maker. Big pharma companies often undergo investigation for possible marketing violations. GlaxoSmithKline’s $3 billion health-care fraud case in 2012 is the United States’ largest to date. GSK chose to pay to settle allegations that it illegally promoted Paxil and Wellbutrin for uses not approved by the FDA. Pfizer agreed to pay $2.3 billion to settle a marketing case of its painkiller drug Bextra in 2009.
Jonathan Kreizman, Head of Research at Bank of Jerusalem said, “It’s hard to know at this point just how significant the case is. But typically these types of cases, if they lead to financial settlements, are seen by investors as one-time events and so shouldn’t be a huge hit for the stock.” Teva’s depositary receipts slumped 1.1% to $44.05 in New York following the news.
The company said it is in the process of complying with the subpoena from the U.S. attorney.