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Taro Pharma agrees to pay $205m to settle U.S. price fixing charges

Christian Fernsby |
Taro Pharmaceuticals U.S.A., Inc. has been charged for conspiring to fix prices, allocate customers, and rig bids for generic drugs, the Department of Justice announced.

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Topics: TARO PHARMA   

A two count felony charge was filed 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 was in excess of $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.

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 coconspirator 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.

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