Teva pays $519M in bribe case

Te va Pharmaceutical Industries will pay $519 million to settle civil and criminal charges that it bribed government officials in Russia, Ukraine and Mexico in order to secure business.

The Israel-based company, the largest maker of generic drugs, bribed officials over a10-year period ended in 2012 to push its sclerosis drug, Copaxone, according to the settlement.

The bribes violated the Foreign Corrupt Practices Act — and the fines were the largest-ever levied by Uncle Sam.

“Teva and its subsidiaries paid millions of dollars in bribes to government officials in various countries, and intentionally failed to implement a system of internal controls that would prevent bribery,” Assistant Attorney General Leslie Caldwell said in a statement Thursday.

In one of the bribe scenarios, from 2010 to 2012, Teva paid a Russian official, allowing the company to reap $200 million in illicit profit seven though Russia’ s public health system was looking to cut its spending on foreign drugs, the company said.

“As alleged in our complaint, Teva failed to devise and maintain proper internal accounting controls to prevent the company’s payments of bribes to win business in certain regions around the globe,” the Securities and Exchange Commission said in a statement.

The SEC ordered the drugmaker to pay $236 million, which represents $214 million in illicit profits and $22 million in interest. A $283 million penalty will be paid to the Justice Department as part of deferred prosecution agreement.

Shares of Teva, which is a hedge fund favorite that counts Viking Global and Paulson & Co. as investors, are down 44 percent for the year amid broader pricing pressures in the pharmaceutical industry.

The stock gained 1.5 percent on Thursday, to $36.91.

“While the conduct that resulted in this investigation ended several years ago, it is both regrettable and unacceptable, andwe are pleased to finally put this matter behind us,” said Teva CEO Erez Vigodman.