Whether name brand or generic, pharmaceutical companies that produce drugs are scrutinized alike.
Teva Pharmaceuticals is under investigation by the Department of Justice and Securities and Exchange Commission (SEC) for potentially violating the False Claims Act.
Teva is the largest generic pharmaceutical company in the country; one in six of the 3.3 billion generic prescriptions in the United States are filled with a Teva product.
Allegations Against Teva Pharmaceuticals
The drug company received a subpoena in January of 2014 from the U.S. attorney for the Southern District of New York in search of documents and information from January 2006 to present related sales, marketing and promotion of its drug Copaxone, used to treat multiple sclerosis, and a Parkinson’s disease treatment drug called Azilect.
In addition to the FCA, in 2012 Teva received subpoenas and informal document requests from the SEC and Justice Department for possible violations of the Foreign Corrupt Practices Act in certain countries.
The company stated that they are in the process of complying with both subpoenas.
What is a False Claims Act?
The FCA is one of the governments’ most powerful weapons against fraud. It is a federal law that imposes liability on persons and companies who defraud governmental programs.
However, the law includes a “qui tam” provision that allows people who are not affiliated with the government to file actions on behalf of the government.
Persons filing under the act stand to receive a portion of any recovered damages.
How The False Act Claim Works
The conduct that creates FCA liability is as follows:
- Any person who knowingly makes a false record or statement to get a false claim by the government
- Any person who knowingly submits a false claim to the government or causes another to submit a false claim to the government.
- The “reverse claims act ,” provides liability where one acts improperly, not to get money from the government, but to avoid paying the government.