Teva's Cephalon forks over $125M in second pay-for-delay settlement


Teva’s Cephalon already struck a settlement with the FTC over its alleged efforts to delay copies of sleep disorder med Provigil. And now it’s settled with 48 states, too.

Cephalon and the states reached a $125 million accord over the so-called “pay-for-delay” deal, New York Attorney General Eric Schneiderman said. The FTC claimed the company had ponied up money to generics makers to convince them to drop their patent challenges to blockbuster Provigil, and the agency settled with Cephalon itself for $1.2 billion just over a year ago.

“When pharmaceutical companies put profits ahead of people by illegally restricting competition, it harms patients across our state. This misconduct, which drives up the cost of prescription drugs, will not be tolerated,” Schneiderman said in a statement.

Litigation over the claims has been going on for years as the FTC vowed to get more serious over pay-for-delay cases. The agency's 2015 Cephalon settlement marked the first time it forced a drugmaker to hand over more than $1 billion—and the first settlement since the Supreme Court in 2013 ruled that patent infringement settlements could be anticompetitive.

Earlier this year, the FTC’s annual report showed that its dogged work might be paying off. In the report, the agency cited just 21 suspect settlements between branded drugmakers and knockoffs makers for fiscal 2014, down from 29 the year prior.

But that doesn’t mean the FTC is letting up in its quest to put an end to the practice. This March, it accused Endo, Allergan and Impax Laboratories of striking a deal to prevent authorized generics of two drugs from hitting the market, slapping the trio with a lawsuit.

Meanwhile, consumers who bought Provigil will now be taking home a $35 million share of the $125 million settlement, with New York, which led the effort, also netting $6 million in compensation for entities that bought off state contracts, Schneiderman said. 

- read the release

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