For years, Teva has been defending itself against allegations that it used illegal Medicare co-pay schemes to fuel sales of its multiple sclerosis drug Copaxone.
Now, two months after the company reportedly weighed a settlement with the U.S. government in an ongoing case, seven private Medicare coverage providers brought a new lawsuit in a Kansas court.
The providers seek to recover damages tied to years of allegedly “tainted” claims paid by Medicare Advantage health plans. The firms accuse Teva of “funneling hundreds of millions of dollars” through two third-party foundations to illegally subsidize the Medicare co-pay obligations of Copaxone patients.
According to the complaint, Teva used The Assistance Fund (TAF) and the Chronic Disease Fund (CDF) not as charities but as “pass-through vehicles” to give money to Copaxone patients and drive up revenues for the product. This process skirted the congressional framework of the Medicare Part D system, according to the plaintiffs.
Teva did not immediately reply to Fierce Pharma’s request for comment.
The U.S. Department of Justice has had its eyes on the issue since 2020, when it filed a false claims lawsuit detailing the alleged kickbacks. At the time, the company defended its involvement with copay charities, noting in a statement that it was "dedicated to patient health and appropriate access to affordable medicines."
That case has not yet gone to trial and has instead remained in pretrial proceedings. In June, Teva lawyers wrote in a filing that the sides were "actively engaged in settlement negotiations and Teva is optimistic that the parties can reach a resolution," Reuters reported at the time.
In that case, an appeals court is reviewing the level of causation required to show the Copaxone claims were false. A trial had been slated for September, but it was postponed over a difference of opinion on that key issue.
The stakes are high in the causation aspect of the case. A Teva-favoring ruling could mean the company could ultimately emerge victorious in the larger case, but, if the court sided with the U.S., damages could exceed $10 billion and represent an “enterprise-threatening amount that may render a post-judgment appeal impossible,” the company’s lawyers previously argued.