Apotex Inc., the Ontario-based drugmaker owned by the billionaire Barry Sherman, has agreed to pay $100 million, including interest, to help U.S. authorities investigate competitors and pay a penalty for its role in a global price-fixing scheme.
US states and federal authorities have accused five manufacturers of engaging in a pattern of price-fixing in drugs like insulin and insulin pens used to inject insulin for diabetes patients. If convicted, the executives could face prison time.
“This agreement is a welcome example of both a zero-tolerance approach to fraud and also an openness to work with other public officials to ensure we eradicate this type of conduct from the pharmaceutical supply chain in the future,” Justice Department Assistant Attorney General John Cronan said in a statement on Thursday.
Sherman was convicted in March of 14 counts related to his dealings with a handful of pharmaceutical companies in Canada, where a country-wide boom in generic drugs has helped bolster profits in a region suffering through a factory decline.
Federal prosecutors accused him of coordinating with executives at GlaxoSmithKline Plc, Teva Pharmaceutical Industries Ltd., Mylan NV and AmerisourceBergen Corp. in a decade-long scheme to suppress drug prices by agreeing to restrict supplies to government programs and limit discounts for pharmacies.
Hirono, New York Senator Charles Schumer, and Illinois Senator Dick Durbin, both Democrats, called on the Justice Department in June to investigate those implicated in the price-fixing scheme.
The companies have agreed to pay the penalty, made an unspecified additional payment to address the investigation, and plead guilty, according to Thursday’s joint statement. The companies didn’t identify those involved or disclose the specific products that were affected.
Interviews in May before Sherman’s trial showed that federal prosecutors sought all available facts about Sherman, who began raising funds for his hobby farm in 1988. His defense, led by Vancouver-based lawyer Joseph Cheshire, argued that Sherman wasn’t at the height of the illegal conspiracy and was frequently seen on company-leased aircraft to go to businesses around the world, including businesses in the U.S.
Cheshire said Thursday his client was grateful to the Justice Department and to the U.S. Attorney’s Office in Chicago for the investigation, which included long hours and the use of emails.
Sherman, 67, died last year of cancer, just weeks before his trial began. Schneiderman went after him for the alleged price-fixing scheme to make up for the depression medication he didn’t need when he was in custody.
The prosecutors dropped their high-profile case against him after the court ruled that the US didn’t have jurisdiction.
The case is US v. Sherman, 15-cr-1289.