Teva To Pay $512 Million, Teva Pharmaceutical Industries Ltd has agreed to pay $512 million to settle a class action claiming that Cephalon Inc, which Teva bought in 2011, used anticompetitive settlements to delay generic versions of its wakefulness drug Provigil.
The settlement is the largest ever to be paid to drug wholesalers and retailers over allegations of delaying generic drugs, according to a motion to approve the settlement filed on Friday in Philadelphia. The settlement still has to be approved by Judge Mitchell Goldberg, who is presiding over the case.
The next largest such settlement, reached in 2008, was for $250 million in a case against Abbott Laboratories and its French partner Fournier Industrie et Santé over the cholesterol drug TriCor.
Teva spokeswoman Denise Bradley said the company was pleased with the settlement.
An attorney for the plaintiffs could not immediately be reached for comment.
The lawsuit, filed in 2006 by so-called direct purchasers - drug wholesalers and retailers that buy directly from drug companies - claimed that Cephalon entered into settlements in patent lawsuits with Israel-based Teva, Mylan Inc and Ranbaxy Laboratories Ltd to keep generic versions of Provigil off the market until 2012. The lawsuit said that the settlements violated federal antitrust law.
Mylan and Ranbaxy, which are also defendants in the case, are not part of the settlement, according to Friday's motion.
Teva is still facing claims from health insurers that bought Provigil from third parties.
The U.S. Federal Trade Commission also sued Cephalon, but not Mylan and Ranbaxy, over the allegedly anticompetitive settlements in 2008. A bench trial in that case is scheduled for June.
The FTC has long criticized so-called "pay-for-delay" settlements in which brand-name drugmakers pay their generic counterparts to keep drugs off the market. The agency won a major victory in 2013 when the U.S. Supreme Court ruled in FTC v. Actavis that such settlements may be illegal.
Michael Carrier, a professor at Rutgers Law School who specializes in pharmaceutical antitrust law, said the size of Friday's settlement underscored the strength of the drug buyers' case, and, by extension, the FTC's.
"It's a very significant payment which can be viewed as an admission of potential liability," he said.
The next largest such settlement, reached in 2008, was for $250 million in a case against Abbott Laboratories and its French partner Fournier Industrie et Santé over the cholesterol drug TriCor.
Teva spokeswoman Denise Bradley said the company was pleased with the settlement.
An attorney for the plaintiffs could not immediately be reached for comment.
The lawsuit, filed in 2006 by so-called direct purchasers - drug wholesalers and retailers that buy directly from drug companies - claimed that Cephalon entered into settlements in patent lawsuits with Israel-based Teva, Mylan Inc and Ranbaxy Laboratories Ltd to keep generic versions of Provigil off the market until 2012. The lawsuit said that the settlements violated federal antitrust law.
Mylan and Ranbaxy, which are also defendants in the case, are not part of the settlement, according to Friday's motion.
Teva is still facing claims from health insurers that bought Provigil from third parties.
The U.S. Federal Trade Commission also sued Cephalon, but not Mylan and Ranbaxy, over the allegedly anticompetitive settlements in 2008. A bench trial in that case is scheduled for June.
The FTC has long criticized so-called "pay-for-delay" settlements in which brand-name drugmakers pay their generic counterparts to keep drugs off the market. The agency won a major victory in 2013 when the U.S. Supreme Court ruled in FTC v. Actavis that such settlements may be illegal.
Michael Carrier, a professor at Rutgers Law School who specializes in pharmaceutical antitrust law, said the size of Friday's settlement underscored the strength of the drug buyers' case, and, by extension, the FTC's.
"It's a very significant payment which can be viewed as an admission of potential liability," he said.
