Barry Sherman, the founder of the generic drug maker Apotex, and his family and friends have agreed to pay $100 million to help the United States launch an investigation into drugmakers’ pricing practices. The Sherman family also has agreed to appoint a non-executive director and consult on procurement and accounting as part of the settlement.
Apotex, now a publicly-traded company, confirmed the settlement deal to the Times. The Sherman family and co-defendants Apotex, Solvay Pharma North America, and Cephalon have also agreed to cooperate with a multi-year investigation into whether there are issues with pricing prices on the resale of patents.
Mr. Sherman and his family each agreed to pay $10 million. They will also be required to abide by a three-year-restrictive payment freeze. Apotex also agreed to continue to abide by current agreements with insurance companies and pay any fines or penalties that are imposed by the U.S. government in connection with the investigation.
Mr. Sherman’s is one of the largest settlements in the history of the federal grand jury investigation of price-fixing in the drug industry. It also marks the second time in a year that the U.S. government has reached a settlement with Apotex, which previously paid $80 million to the government to resolve similar allegations. Last year, the U.S. Department of Justice accused of Apotex of “behaving much more like a market maker than a mere drug manufacturer.” (Mr. Sherman was not accused of any wrongdoing.) The complaint said that Apotex was “more interested in selling drugs than in making them.”
Federal and provincial prosecutors in Canada have also alleged that Mr. Sherman committed fraud against Apotex customers and retaliated against whistleblowers who exposed the price-fixing allegations.
The complaint came after a probe launched in 2013 by several federal prosecutors in the United States and a trio of provincial prosecutors in Canada. Mr. Sherman has long been known as a philanthropist and progressive, who supported a number of charitable causes, including $20 million to support the Strengthening Lives program, which provides eyeglasses and optical care for low-income individuals.
“The focus is on bringing the criminals responsible for this conduct to justice,” Robert Chesney, a law professor at the University of Texas School of Law, told the Times. “The Sherman family has had a positive impact in Canada for many years. They are well known for their generosity and social good works.”
Apotex, originally founded in Toronto in 1974, has become one of the largest generic drug makers in the world, and it has been part of the privately-held Permira, which is Mr. Sherman’s private investment company, since 1999. Apotex is listed on the Toronto Stock Exchange, though its value did fall in 2018 after Mr. Sherman died of lung cancer, which the company said he had suffered from for several years.
Mr. Sherman’s story once again reminds the world that despite the worst mistakes, people can go on to have a positive impact. — Ben Banks (@rwtc05) March 29, 2020
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Toronto philanthropist Barry Sherman donated $20 million to fund social causes