State sues Teva over Copaxone drug royalties

Two doctors sued Teva for failing to acknowledge their contributions and demanded to be compensated with royalties stemming from the new version of copaxone.

Teva CEO Kåre Schultz at the Tel Aviv Stock Exchange, February 19, 2020 (photo credit: SIVAN FARAG)
Teva CEO Kåre Schultz at the Tel Aviv Stock Exchange, February 19, 2020
(photo credit: SIVAN FARAG)

The state filed a lawsuit against pharmaceutical giant Teva for NIS 340 million on Wednesday, over royalties relating to its star medical drug for multiple sclerosis known as Copaxone.

According to the lawsuit brought in Lod District Court, Teva had a patent for Copaxone from 1996 until 2014, and then put out a new updated version leading up to the expiration of the patent in 2014.

That updated version instructed taking the medicine three times a week and at a higher dosage, instead of on a daily basis.

The state said that significant aspects of the research that led to the issuing of the updated version came out of state-funded researchers and medical centers, including Prof. Amos Corchin from Ichilov Medical Center and Dr. Shlomo Flechter from Assaf Harofeh Medical Center.

The two doctors sued Teva for failing to acknowledge their contributions, and demanded to be compensated with royalties stemming from the new version of Copaxone.

A building in Jerusalem belonging to generic drug producer Teva (credit: REUTERS/BAZ RATNER)A building in Jerusalem belonging to generic drug producer Teva (credit: REUTERS/BAZ RATNER)

In Wednesday’s lawsuit, the state accused Teva of hiding from the government that it had rights to royalties from the new version. According to the lawsuit, the state learned that its rights to royalties were being violated only after learning of the lawsuit filed by the two medical researchers in 2018.

The state’s lawsuit preemptively addresses defenses that Teva has already made in the 2018 lawsuit, claiming that the research of the two medical centers was qualitatively different from the research that led to producing the new Copaxone.

The state said that the differences in the research from the state medical centers compared with other research that Teva was involved in were extremely small and insignificant.

Moreover, the state noted that Teva itself cited the research from the two medical centers in its application for a new patent to the US Food and Drug Administration.

According to the state, this citation in and of itself proved the critical contribution of state-funded research both to developing the new drug and to getting the new drug approved by the FDA.

Teva reported last week that its revenue for the first quarter of 2022 was $3.7 billion. It is thought that the lawsuit could have a considerable impact but is not likely to raise questions about its long-term stability.