What happened
Teva Pharmaceutical Industries (TEVA 0.63%) stock closed the trading week in style, rising by over 3% on a bleak and bearish day for the wider market. Investors were cheered by a legal settlement the generic drugs specialist reached in a case in Georgia.
So what
Teva Pharmaceuticals, the company's key subsidiary, has reached an agreement with the southern state's attorney general to settle accusations of price-fixing. Under the terms of the arrangement, Teva is to pay just under $3.35 million; in return, once the funds are handed over Georgia will dismiss all claims against the company in the case.
The Georgia suit is one of a clutch of actions brought against generic drug makers like Teva. Three years ago, 43 states sued a clutch of pharmaceutical companies over allegations that they organized, operated, and attempted to conceal nationwide price-fixing schemes.
Lately, Teva has been busy settling some of these cases; this one is No. 3. It reached a settlement with Louisiana earlier this year for $1.45 million, and last year arranged another with Mississippi for $925,000.
In its press release divulging the news, Teva wrote that it is "pleased to put these claims behind us." It added that it continues to deny the price-fixing allegations.
Now what
Investors were certainly relieved that Teva is continuing to put this ugly period behind it. They are also likely pleased with the settlement amount, which is minuscule compared to the whopping $420 million deal it reached with its investors at the start of this year over similar accusations. In that suit, the plaintiffs claimed Teva had hiked the prices of some medications by over 1,000%.
