Drug company Apotex to pay $100m to settle fraud charges

Shutterstock In a high-profile move, Canadian company Apotex Inc has paid $100 million to settle civil fraud charges by the U.S. Justice Department and has agreed to help prosecutors and regulators with their cases…

Drug company Apotex to pay $100m to settle fraud charges

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In a high-profile move, Canadian company Apotex Inc has paid $100 million to settle civil fraud charges by the U.S. Justice Department and has agreed to help prosecutors and regulators with their cases against rival companies.

The company announced on Friday it will work with the U.S. Department of Justice and the Food and Drug Administration on a $110 million campaign to rebut allegations that it engaged in price-fixing. The charges follow the New York-based company’s purchase in 2008 of Chicago-based pharmaceutical supplier Advanced Medical Optics Inc, which, prosecutors say, led to price-fixing in the global laser eye surgery business.

The eye doctor-owned company, whose namesakes founded a huge drugstore chain, “has since conducted an extensive investigation into the allegations, including from dozens of interviews, and reviewed millions of pages of documents,” according to Friday’s news release.

“This settlement marks the end of an important phase of Apotex’s cooperation with investigators and regulators, and represents the beginning of an ongoing period of investment in FDA resources to look into competitive relationships and practices,” John D. Roth, senior adviser to Apotex Chief Executive Officer Dr. Barry Sherman, said in a statement.

The deal is believed to be Apotex’s largest-ever with federal authorities. The company disclosed the liability in conjunction with a corporate restatement of its 2017 financial results.

Friday’s SEC filing also included Apotex’s decision to establish a $400 million escrow account to cover potential fines related to the ongoing investigation of the company’s businesses.

In a federal grand jury’s recent indictment of three drug executives, the government accused them of “taking steps to make the company the sole bidder for contracts, to deliberately create artificially high prices and to set prices on products to artificially lower them.”

The individuals, who served as senior executives with Apotex and pharma company Teva Pharmaceutical Industries Ltd, are currently out on bond and awaiting trial.

Apotex, which generated $10.5 billion in sales in its last fiscal year, said its total liabilities included a $100 million civil liability that federal authorities could later recover by allowing the company to use the federal assets to pay fines.

— The Associated Press

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