Teva's Cephalon to ink $65.8M class-action settlement in Provigil pay-for-delay suit after judge's OK

A Pennsylvania federal judge has approved a $65.8 million class-action settlement to end charges Teva's Cephalon stifled competition for its Provigil. (Teva)

Mired in pay-for-delay lawsuits over its narcolepsy drug Provigil, Teva’s Cephalon is looking to clear the field. A class-action settlement in Pennsylvania could help ease investors’ minds.

A federal judge has approved a $65.8 million settlement between Teva’s Cephalon and five plaintiffs on charges the drugmaker incentivized other generics makers to keep Provigil competitors off the market to protect the now-generic drug’s sales.

The civil suit comes four years after Teva agreed to pay out $1.2 billion to settle a Federal Trade Commission probe into similar charges that the Israeli drugmaker promised competitors Mylan and Sun Pharmaceuticals payment for active ingredients and intellectual property—deals that made “no economic sense” for Cephalon beyond stopping competition.


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A Teva spokeswoman could not be reached for comment by press time.

The potential closing of the class-action Provigil lawsuit mostly shuts the door on the Provigil front of Teva’s ongoing legal troubles.

RELATED: Teva claws back $50M from former execs, board members to pay for 2016 foreign bribery settlement

Late last month, the drugmaker reached an agreement with former execs to claw back $50 million to help cover its $519 million settlement with the DOJ and SEC in 2016 to end a foreign bribery probe.

In that case, a series of Teva shareholder lawsuits accused the company of raking in $276 million in profits from its arrangement to shell out millions to unnamed foreign officials in Ukraine, Russia and Mexico between 2007 and 2012.

Teva agreed to pay $519 million to the U.S. government and an additional $22 million to the Israel State Attorney’s Office.

RELATED: Teva, denying 'any liability,' set aside $646M for opioid settlements. Here's why

Teva’s also been on the receiving end of scrutiny for marketing of its generic opioids in nationwide litigation that has swamped the industry.

Last week, the drugmaker said it had set aside $646 million in potential settlement funds despite not acknowledging any wrongdoing. Teva previously agreed to pay the state of Oklahoma $85 million to settle an illegal marketing probe in that state.

Outgoing Teva CFO Michael McClellan told investors in a Thursday earnings call that the drugmaker reached the $646 million amount by extrapolating the range of potential settlements from the one it signed in Oklahoma.

"We still don't see that we have a huge liability in this case in terms of causing this epidemic, but we do know that there is a lot of cases going on and there is a likelihood that some of these could settle in the future,” McClellan said. 

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