Pharma Co. to Pay $1.2B For Allegedly Blocking Competition

Teva Pharmaceutical Industries settles "pay for delay" case.

Photograph by Shutterstock

Photograph by Shutterstock

A local pharmaceutical company charged with paying generic drug manufacturers to delay the release of competing medications has agreed to a $1.2 billion settlement with the Federal Trade Commission.

Teva Pharmaceutical Industries agreed to the settlement in the “pay for delay” case involving its Chester County subsidiary Cephalon Inc., which makes sleep-disorder drug Provigil. (Teva bought Cephalon in 2012 and employs 2,000 people in the Philadelphia region.)

With sales of Provigil exceeding $1 billion, FTC Chairwoman Edith Ramirez called it a “landmark settlement” and said it’s a step forward in protecting Americans from unnecessarily high drug costs.

“Requiring wrongdoers to give up their ill-gotten gains is an important deterrent,” she said.

The case has been ongoing since 2008. Cephalon allegedly tried to protect its Provigil monopoly through a series of agreements with four generic drug manufacturers in late 2005 and early 2006. Cephalon allegedly sued the generic drug makers for patent infringement and later paid them more than $300 million to drop their patent challenges and forgo marketing their generic products until April 2012.

Denise Bradley, a Teva representative gave the following statement:

Teva confirms that it has reached a settlement with the FTC in regards to the lawsuit brought against Cephalon, Inc related to agreements in 2005-06, prior to Teva’s purchase of the company. We are pleased to have reached an agreement with the government. In relation to the Consent Decree, Teva believes it is the right path for our Company, for the industry and for the patients we serve.