Canada Bans Teva USA from Federal Contracts Over US Price-Fixing Scandal

The Canadian government has barred Teva Pharmaceuticals USA, the American arm of the global generic drug manufacturer Teva Pharmaceuticals, from entering into federal contracts until spring 2025. This decision is a consequence of the company’s involvement in a “domestic antitrust cartel” in the United States, leading to a US$225-million criminal penalty.

Teva Pharmaceuticals USA was officially added to the Canadian government’s list of ineligible or suspended suppliers in October, following its agreement to pay a substantial penalty for participating in price-fixing conspiracies related to three drugs in the U.S.

The ban, set to expire in April 2025, may be subject to extension. Notably, this prohibition does not extend to Teva’s local subsidiary, Teva Canada. Some legal experts have characterized the punishment as largely symbolic, emphasizing its limited impact on the company.

Mark Warner, a business regulation lawyer based in Toronto, likened the ban to a mild reprimand. “It’s more symbolic. It’s like being in school, and the teacher puts you in the corner. It’s not nice, but it’s better than the strap,” Warner commented, highlighting the relatively minor consequences faced by Teva Pharmaceuticals USA in Canada.

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“The reason companies take these regimes really seriously in the United States is because there’s bite. But if you repeatedly go to subsidiaries that don’t do much business with the government, then there’s not a lot of bite,” Warner added, underscoring the importance of substantial penalties to deter unlawful activities.

Public Services and Procurement Canada (PSPC) spokesperson Jeremy Link stated that Teva Pharmaceuticals USA was added to the suspended supplier list after being “charged with relevant offenses in the United States.” However, he did not provide details on the specific offenses in question.

Teva Pharmaceuticals USA’s suspension from federal contracts aligns with its entrance into a deferred prosecution agreement with the US government in August. US authorities labeled the agreement as a resolution to a massive “domestic antitrust cartel.” Teva spokesperson Yonatan Beker confirmed the connection between the suspension and the deferred prosecution agreement.

Source: The Province