The U.S. attorney in Manhattan sent the Petach Tikva, Israel-based company a civil investigative demand for documents and information relating to the sales of Copaxone and Azilect from 2006 through the present, Teva said in its annual report filed today with the U.S. Securities and Exchange Commission. A spokesman said he couldn’t immediately comment further.
Drug companies often face scrutiny for marketing medicines for unapproved uses. In the largest-ever U.S. health-care fraud case, GlaxoSmithKline Plc agreed in 2012 to pay $3 billion to resolve allegations that included illegally promoting the drugs Paxil and Wellbutrin for uses not approved by the U.S. Food and Drug Administration. Pfizer Inc. paid $2.3 billion in a 2009 settlement over marketing of the painkiller Bextra.
“It’s hard to know at this point just how significant the case is,” said Jonathan Kreizman, head of research at Bank of Jerusalem. “But typically these type of cases, if they lead to financial settlements, are seen by investors as one-time events and so shouldn’t be a huge hit for the stock.”
Teva’s American depositary receipts fell 1.1 percent to $44.05 at the close in New York.
“The demand states that the government is investigating possible civil violations of the federal False Claims Act,” Teva said in the filing. “Teva is in the process of complying with the subpoena.”
Jerika Richardson, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, said her office could neither confirm nor deny an investigation of Teva.
Copaxone, an injection for multiple sclerosis, is Teva’s best-selling product, with sales of $4.3 billion last year. The medicine, which analysts say contributes more than 50 percent of Teva’s profit, faces competition from cheaper generics as soon as May. The injectable drug already has competition from newer branded medicines that come in pill form.
Azilect, a treatment for Parkinson’s disease, had sales of $493 million in 2013.
Teva disclosed in 2012 that the U.S. Justice Department asked the company for documents relating to a bribery investigation in Latin America. The company said in October 2013 that following its own internal investigation it has found suspect business practices in eastern Europe and Russia that may have implications under the Foreign Corrupt Practices Act.
For Related News and Information: Teva Says U.S. Requests Documents in Overseas Bribery Probe
To contact the editor responsible for this story: Phil Serafino at email@example.com