Pharmaceutical Companies Fraud: Teva and Apotex Corporation

Pharmaceutical Companies Fraud
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Pharmaceutical Companies Fraud
Small and large-scale pharmaceutical companies are subject to government investigation for committing fraudulent acts, such as manipulating the cost and efficacy of medications to increase their profits. For example, since 2010, the cost of prescription medications has increased by 50%. Approximately $535 billion was spent by Americans to buy drugs in 2018 (Meller & Ahmed, 2019). The increase in prices for these drugs surpassed inflation. Big and small pharmaceutical companies have been increasing the prices of commonly purchased medications. For instance, from 2011 to 2015, the cost of drugs increased by 40%-71% (Meller & Ahmed, 2019). The paper focuses on the fraudulent actions of Teva Pharmaceutical Industries Limited (Teva), the largest maker of generic drugs worldwide, and Apotex Corporation and the resulting response by the federal government.
The United States of America's (USA) government investigated Teva, which was found to have been involved in several fraudulent actions. Stephen Richardson, the Criminal Investigative Division's Assistant Director of the Federal Bureau of Investigation (FBI), Leslie Caldwell, the Justice Department's Assistant Attorney General in the Criminal Division, and William Maddalena, the Assistant Special Agent from Miami's Field FBI Office announced that Teva, together with its branches, has been found guilty in price manipulation of their pharmaceutical products not only in the USA but other countries as well (The United States Department of Justice, 2017). In addition, the pharmaceutical company paid public officials millions of dollars in bribes in different countries. Being the biggest pharmaceutical maker of generic drugs worldwide, Teva had failed to implement an effective internal control system to prevent bribery. Teva was found guilty of paying bribes to high-ranking government officials so that it could manipulate the prices of drugs without the government's intervention. For example, Teva earned over $200 million by increasing the prices of Copaxone, a multiple sclerosis drug, in Russia between 2010 and 2012. The Russian government official involved in this corrupt deal of inflating the profit margins earned about $65 million (The United States Department of Justice, 2017). However, the American government is committed to investigating pharmaceutical companies, such as Teva, which are involved in fraudulent actions of manipulating the price of drugs to enrich themselves.
Upon investigations, Teva admitted that it did not have an effective internal accounting control system in place. The company's executives knew it, but they did nothing since they were involved in corrupting primary stakeholders in different countries so that the pharmaceutical company would make significant profits. In some cases, Teva subsidiaries bribed healthcare providers so that they could prescribe the most purchased drugs, such as Copaxone, in specific regions. Based on the deferred prosecution agreement (DPA) that Teva filed in Florida's Southern District in 2017, the company agreed to pay a penalty of over $283 million. Additionally, Te...