Litigation Details for THERAPEUTICSMD, INC. v. TEVA PHARMACEUTICALS USA, INC (D.N.J. 2020)

THERAPEUTICSMD, INC. v. TEVA PHARMACEUTICALS USA, INC (D.N.J. 2020)

Docket		Date Filed	2020-04-01
Court	District Court, D. New Jersey	Date Terminated
Cause	15:1126 Patent Infringement	Assigned To	Brian R. Martinotti
Jury Demand	None	Referred To	Stacey D. Adams
Parties	TEVA PHARMACEUTICAL INDUSTRIES LIMITED
Patents	10,052,386; 10,206,932; 10,258,630; 10,398,708; 10,471,072; 10,537,581; 10,568,891; 10,639,375; 10,668,082; 10,675,288; 10,806,697; 10,835,487; 8,633,178; 8,846,648; 8,846,649; 8,987,237; 8,993,548; 8,993,549; 9,006,222; 9,114,145; 9,114,146; 9,180,091; 9,289,382; 9,301,920
Attorneys	ALEXANDER LEE CALLO
Firms	Saul Ewing Arnstein & Lehr LLP
Link to Docket	External link to docket

Details for THERAPEUTICSMD, INC. v. TEVA PHARMACEUTICALS USA, INC (D.N.J. 2020)

Date Filed	Document No.	Description	Snippet	Link To Document
2020-04-01				External link to document
2020-04-01	1	Complaint	Exhibit B), U.S. Patent No. 10,258,630 (“the ’630 patent”) (attached as Exhibit C), U.S. Patent No. 10,398,708…involving U.S. Patent No. 9,180,091 (“the ’091 patent”) (attached as Exhibit A), U.S. Patent No. 9,289,382…the ’708 patent”) (attached as Exhibit D), and U.S. Patent No. 10,471,072 (“the ’072 patent”) (attached…’072 patents. The ’091, ’382, ’630, ’708, and ’072 patents are five (5) of the seven (7) patents listed…before the patent expiration of the ’581 patent. As indicated in FDA’s Orange Book, the patent expiration	External link to document
2020-04-01	52	Counterclaim AND Answer to Complaint	9,301,920, U.S. Patent No. 10,052,386, U.S. Patent No. 10,206,932, U.S. Patent No. 10,639,375…U.S. Patent No. 10,806,697 (“the ’697 patent”) and U.S. Patent No. 10,835,487 (“the ’487 patent”) are….S. Patent No. 10,806,697 (“the ’697 patent”) and U.S. Patent No. 10,835,487 (“the ’487 patent”) either….S. Patent No. 10,806,697 (“the ’697 patent”) and U.S. Patent No. 10,835,487 (“the ’487 patent”). … Patent No. 9,006,222, U.S. Patent No. 9,114,145, U.S. Patent No. 9,114,146, U.S. Patent No	External link to document

Litigation Summary and Analysis: United States v. Teva Pharmaceuticals USA, Inc.

Introduction

The litigation involving Teva Pharmaceuticals USA, Inc. and its subsidiary, Teva Neuroscience, Inc., is a significant case that highlights the complexities and consequences of violating the Anti-Kickback Statute (AKS) and the False Claims Act (FCA). Here, we will delve into the key aspects of the case, the allegations, the legal proceedings, and the outcomes.

Background

The case revolves around Teva Pharmaceuticals' practices related to its multiple sclerosis drug, Copaxone. The U.S. government alleged that Teva violated the AKS and FCA by making donations to charitable foundations that were used to subsidize the copays of Medicare patients for Copaxone[1][2][3].

Allegations

The government alleged that between 2006 and 2017, Teva made substantial donations to the Chronic Disease Fund (CDF) and the TAF (The Assistance Fund), with the intent that these donations would be used to cover the copays of Medicare patients for Copaxone. This practice was alleged to be a violation of the AKS, as it constituted an indirect payment to patients to induce them to purchase Teva's drug, thereby generating false claims for reimbursement from Medicare[1][2][3].

Legal Proceedings

The case was filed in the District Court of Massachusetts in August 2020. Teva filed a motion to dismiss the complaint, arguing that the government had not adequately alleged the requisite intent under the AKS. However, the court denied this motion, finding that the government had plausibly alleged that Teva intended its donations to induce purchases of Copaxone by Medicare patients[1].

Causation and Scienter

A critical aspect of the case was the issue of causation and scienter. The government needed to establish a sufficient causal connection between Teva's donations and the resulting Medicare claims. The court ruled that the government had provided sufficient evidence to demonstrate this causal connection, rejecting Teva's argument that the government must prove a "but for" causation[3].

Additionally, the government had to show that Teva acted with the requisite scienter, meaning that Teva knowingly or willfully violated the AKS and FCA. The court found that the government had gathered sufficient evidence to defeat Teva's motion for summary judgment based on a lack of scienter, including internal documents and testimony that highlighted Teva's awareness of the legal risks associated with its practices[3].

Settlement and Outcomes

In October 2024, Teva agreed to pay $450 million to resolve the allegations. This settlement included $425 million to resolve the AKS and FCA claims related to Copaxone copay assistance, making it the DOJ's largest copay assistance settlement to date. An additional $25 million was paid to resolve allegations related to a price-fixing scheme involving other generic drugs[2].

Implications and Lessons Learned

Compliance with AKS and FCA

The case underscores the importance of strict compliance with the AKS and FCA. Pharmaceutical companies must ensure that their interactions with charitable foundations and patient assistance programs do not constitute indirect kickbacks that could induce the purchase of their drugs.

Intent and Causation

The court's ruling on causation highlights that a "sufficient causal connection" between the alleged kickbacks and the resulting claims is enough to satisfy the FCA, rather than a strict "but for" causation standard. This sets a precedent for future cases involving similar allegations.

Scienter and Knowledge

The evidence presented in the case demonstrates that companies must be aware of and adhere to legal guidelines. Internal communications and documents can serve as crucial evidence in establishing scienter, emphasizing the need for transparent and compliant business practices.

Key Takeaways

• AKS and FCA Violations: Teva's actions were deemed violations of the AKS and FCA, resulting in significant financial penalties.
• Causation Standard: The court established that a sufficient causal connection between the alleged kickbacks and the resulting claims is sufficient to satisfy the FCA.
• Scienter: Companies must demonstrate a clear understanding of legal guidelines to avoid allegations of knowing or willful violations.
• Compliance: Strict compliance with regulatory statutes is crucial to avoid legal and financial repercussions.

Frequently Asked Questions (FAQs)

1. What were the main allegations against Teva Pharmaceuticals in this case? The main allegations were that Teva violated the Anti-Kickback Statute (AKS) and the False Claims Act (FCA) by making donations to charitable foundations that were used to subsidize the copays of Medicare patients for Copaxone.

2. How much did Teva agree to pay to resolve the allegations? Teva agreed to pay $450 million to resolve the allegations, with $425 million related to the Copaxone copay assistance and $25 million related to a price-fixing scheme.

3. What was the significance of the court's ruling on causation? The court ruled that a "sufficient causal connection" between the alleged kickbacks and the resulting claims is enough to satisfy the FCA, rather than a strict "but for" causation standard.

4. What evidence was used to establish scienter against Teva? Internal documents and testimony, including handwritten notes and presentations, were used to establish that Teva knowingly or willfully violated the AKS and FCA.

5. What are the implications of this case for pharmaceutical companies? The case emphasizes the importance of strict compliance with the AKS and FCA, particularly in interactions with charitable foundations and patient assistance programs, and highlights the need for transparent and compliant business practices.

Cited Sources

1. United States v. Teva Pharm. U.S., 560 F. Supp. 3d 412 - Casetext
2. Teva Pharmaceuticals Agrees to Pay $450 Million to Resolve FCA Claims - National Law Review
3. United States v. Teva Pharm. U.S., 682 F. Supp. 3d 142 - Casetext