Teva Pharmaceutical Industries Ltd. ("Teva") is an Israeli pharmaceutical corporation and the largest generic drug manufacturer in the world. Teva’s American Depositary Receipts traded on the Nasdaq National Market from October 1987 until May 2012, when Teva transferred the listing of its American Depositary Receipts to the New York Stock Exchange.
From 2006 to 2012 , Teva paid bribes to a high-ranking government official in Russia ("Russian Official") intending to influence the official to use his authority to increase sales of Teva’s multiple sclerosis drug, Copaxone, to the Russian government. In 2009, the Russian government announced a new strategy for the Russian Federation's domestic pharmaceutical industry which established a preference for domestic products. In response, Teva partnered with a distribution company ("Russian Distributor") owned by Russian Official to repackage and distribute Copaxone in Russia. In part as a result of Teva’s relationship with Russian Distributor, Teva's Copaxone sales in Russia increased over time and Copaxone’s market share grew. In exchange, Teva offered discounts to Russian Distributor that were larger on average than discounts given to other distributors Teva used in Russia.
From 2001 to 2011, Teva paid a prominent Ukrainian government official (“Ukrainian Official” ) more than $200,000 in exchange for his improper political influence in the process of registering and promoting various Teva drugs in Ukraine. ln or around August 2001, Teva engaged Ukrainian Official as a third-party "registration consultant'' and entered into consulting agreements to pay Ukrainian Official a monthly "consultancy fee.'' In addition to the monthly payments, Teva provided Ukrainian Official with cash bonuses, travel expenses and other things of value. The consulting agreement between Teva and Ukrainian Official was renewed annually, on the same terms, until in or around late 2011. Teva stopped paying Ukrainian Official at the end of 2009, at which point Teva's Ukrainian subsidiary took over payments.
In 2011 and 2012, Teva's Mexican subsidiaries made illegal payments through a distributor to doctors employed at government hospitals to influence their Copaxone prescription decisions. Although Teva had earlier discovered credible evidence of improper payments by Teva's Mexican subsidiaries to government officials in Mexico, the company failed to implement internal accounting controls sufficient to meet the risks posed by Teva’s business in Mexico.
In total, Teva realized more than $214,596,170 in profits from business obtained as a result of illegal payments to foreign officials in Russia, Ukraine, and Mexico.
On December 22, 2016, the DOJ filed a criminal Information charging Teva with one count of conspiracy to violate the antibribery provisions of the FCPA and one count of failing to implement adequate internal controls. That same day, Teva entered a deferred prosecution agreement (DPA) and agreed to pay a total criminal penalty of $283,177,348. Teva also agreed to disgorge profits in the amount of $214,596,170 plus prejudgment interest on the disgorgement of $21,505,654, which would be deemed satisfied by payment of an equal amount to the SEC. Teva also agreed to continue to cooperate with the department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for a term of three years.
Separately, Teva's Russian subsidiary signed a plea agreement in which it has agreed to plead guilty to a onecount criminal information charging the company with conspiring to violate the antibribery provisions of the FCPA.
In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Teva. The company consented to a final judgment under which it agreed to pay approximately $236 million in disgorgement to the SEC, including prejudgment interest. The combined total amount of U.S. criminal and regulatory penalties to be paid by Teva is nearly $520 million.
