Company: Teva, Endo, Teikoku Seiyaku
Settlement amount: $270 million
Date: May 2018
Claims: Pay-for-delay deals
Plaintiff: Securities and Exchange Commission
In recent years, “pay-for-delay” deals in pharma have been on the downswing after hitting a peak in the early 2000s. But that doesn’t mean that those cases aren’t still floating around—and drugmakers sometimes pay big money to get out from under them.
In May 2018, Endo, Teva and Japanese drugmaker Teikoku Seiyaku agreed to fork over more than $270 million collectively to resolve years-old litigation alleging that Actavis and Endo struck illegal deals to delay cheaper Lidoderm generics as the lidocaine patch's patent protection ran out.
Teikoku licensed and manufactured Lidoderm for Endo to distribute in the U.S., according to a 2007 agreement posted on the SEC website.
In a deal with the "end-payor" class, defendants agreed to pay $104.75 million, while the defendants approved $166 million to settle their dispute with direct purchasers. In all, Endo paid $100 million, while Teva shelled out $112 million and Teikoku agreed to nearly $59 million.
The lawsuits said Watson—which later became part of Actavis—delayed its generic launch for nine months in exchange for $96 million worth of "free brand Lidoderm" plus a commitment from Endo and Teikoku not to launch their authorized generic for 7.5 months after Watson's product hit the market. Teva picked up the drug, and its attendant legal issues, when it bought the Actavis generics unit from Allergan in 2016.