Teva’s stock sinks 10% on False Claims allegations

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Shares of Teva Pharmaceutical Industries Ltd. tumbled 10.9% in trading on Tuesday after the U.S. government alleged that the drugmaker had illegally paid Medicare co-pays for the multiple sclerosis drug Copaxone through two foundations. The Department of Justice said doing so violates anti-kickback laws. Copaxone has long been Teva’s top-selling drug, though sales have dwindled in recent years. The drug generated $4.2 billion in sales in 2014; however, in the first six months of 2020, it brought in $628 million in the U.S. and Europe combined. The government alleges that Teva gave funding to The Assistance Fund and the Chronic Disease Fund to cover Medicare co-pays for Copaxone between 2007 and 2015. “Drug manufacturers that offer kickbacks in order to boost profits – as alleged in this case – drive up health care costs for everyone and undermine the public’s trust in the health care system,” Phillip Coyne, an official for the U.S. Department of Health and Human Services’ Office of Inspector General, said in a news release. Anti-kickback laws do not allow drugmakers to provide financial incentives, such as covering the cost of a drug’s co-pay, to entice Medicare beneficiaries to select that medication. Teva did not immediately respond to a request for comment. Teva’s stock is up 14.1% for the year, while the S&P 500 has gained 4.7%.
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