Teva Pharmaceutical Industries Ltd. and subsidiaries Cephalon Inc. and Barr Pharmaceuticals Inc. have agreed to pay $512 million to settle with the direct purchasers in pay-for-delay litigation over Cephalon’s narcolepsy drug Provigil. The settlement was disclosed on April 17. The direct-purchaser class Plaintiffs, including King Drug Co. of Florence Inc., are asking a Pennsylvania federal judge to give preliminary approval to the settlement. Under the terms, the drug makers will pay $512 million in cash into an escrow fund for the class. The lawsuit would be dismissed with prejudice upon final approval.
Under the agreement, the Defendants would also be permanently released from any claims relating to the alleged delayed entry of generic versions of Provigil and claims of conduct relating to Cephalon’s narcolepsy drug Nuvigil. The direct purchasers noted that the settlement is the largest ever in a pay-for-delay case on behalf of direct purchasers, and that preliminary approval is appropriate. “[Direct-purchaser class] Plaintiffs and the Cephalon Defendants entered into the settlement after fully extensive mediation and negotiations. The proposed class under the settlement includes any person or entity in the U.S. that purchased Provigil from Cephalon between June 24, 2006, and Aug. 31, 2012.
The U.S. Federal Trade Commission (FTC) is set to go to trial in June in a case. It’s alleged that Cephalon made billions of dollars through a series of pay-for-delay deals meant to stave off competition with its blockbuster narcolepsy drug. The case being settled is part of a series of suits brought by direct purchasers, end payors and the FTC challenging a series of patent infringement settlements that Cephalon reached with generics companies in 2005 and 2006 over Provigil. The case is in U.S. District Court for the Eastern District of Pennsylvania.
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