Mylan signs off on $96.5M Provigil pay-for-delay settlement

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Mylan agreed to a $96.5 settlement agreement on an antitrust class action suit relating to Provigil generic delays.

Persistence has paid off for a group of drug purchasers that sued Mylan and others more than a decade ago over delays to generics of Teva’s narcolepsy med Provigil.

Mylan has agreed to settle an antitrust class action lawsuit for $96.5 million in cash after the plaintiffs claimed the company entered into “unlawful ‘reverse payment’ agreements” with Cephalon—now part of Teva—to delay Provigil generics.

The settlement, reached after “intense, fully-developed litigation and extensive mediation and negotiations,” was disclosed in a court filing (PDF) Friday. 

Teva previously settled with the plaintiffs for $512 million in April 2015 and with the FTC for $1.2 billion the next month.

As charged in the FTC’s lawsuit, Cephalon sued generics companies for patent infringement and then paid $300 million in a series of agreements in 2005 and 2006 to keep Provigil copycats at bay until April 2012.

The agency said Teva promised payments for active ingredients and intellectual property, deals that “made no economic sense" for the company other than as "reverse payments" to stall competition.

At the time of the patent settlements, Provigil was turning in about $500 million in annual sales, according to a previous SEC filing. The drug’s annual haul climbed higher than $1 billion by 2012 and sank sank to just $91 million the next year as competition hit.

The plaintiffs filed suit back in 2006 arguing that they had to overpay for Provigil due to the deals.

As a result of Mylan’s agreement, purchasers in the class “will receive a substantial cash settlement payment” and the litigation will be “put to rest,” according to the court filing. The deal requires a court’s approval.

"Nothing in the settlement agreement constitutes an admission of wrongdoing" by the company, according to a Mylan spokesperson. She added the drugmaker "believes the proposed settlement is in the best interests of the company and is an important step in moving forward.”

Ranbaxy Laboratories, which has been named as a defendant, is not part of the agreement.

For Mylan, the deal comes after it worked to navigate a bruising EpiPen pricing controversy and after it announced thousands of layoffs. But while it's agreed to put the class action suit to bed, the company has yet to finalize its $465 million deal with the Department of Justice over alleged EpiPen misclassifications on Medicaid, first announced back in October.