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Teva, FTC reach settlement

CephalonTeva Pharmaceutical will pay US$1.2 billion (A$1.6 billion) to settle US antitrust charges in a long running “pay for delay” case involving Cephalon, which Teva acquired in 2012, the Federal Trade Commission says.

Israel-based Teva, the world’s largest generic drug manufacturer, agreed to make the money available to compensate buyers, including drug wholesalers, pharmacies and insurers, who overpaid for Cephalon’s blockbuster sleep disorder drug Provigil because of that company’s illegal conduct.

Under the settlement announced on Thursday, Teva also agreed to a prohibition in all of its US operations on the type of anti-competitive patent settlements that Cephalon used to artificially inflate the price of Provigil, according to the FTC.

The settlement stems from a 2008 FTC lawsuit against Cephalon alleging that the company unlawfully protected its monopoly on prescription drug Provigil from competition through so called “reverse payment” deals with four generic drugmakers in 2005 to 2006.

Cephalon allegedly sued the drugmakers for infringing its Provigil patent and later paid them more than US$300 million combined to drop their patent challenges and pledge to withhold marketing their generic versions for six years, until April 2012.

The Teva settlement is the first FTC case resolved after the US Supreme Court ruled in 2013 that reverse payment patent settlements are subject to US antitrust rules, the commission noted.

“Today’s landmark settlement is an important step in the FTC’s ongoing effort to protect consumers from anti-competitive pay for delay settlements, which burden patients, American businesses, and taxpayers with billions of dollars in higher prescription drug costs,” FTC chair, Edith Ramirez, said in a statement.

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

The FTC settlement allows Teva to receive credit against the US$1.2 billion fund for related payments it has made, with any remaining money in the fund to be paid to the US Treasury.

AFP

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