Cephalon Inc. has reached a $125 million settlement with 48 states including New York, New Jersey, Florida, Pennsylvania and Texas to resolve allegations it paid generic-drug makers to delay launching their own version of narcolepsy treatment Provigil. Cephalon, Barr Pharmaceuticals Inc. and their parent company Teva Pharmaceutical Industries Ltd. have agreed to pay $125 million to the 48 states and the District of Columbia, as well as individual consumers. This will bring to an end a multistate investigation into allegations the companies delayed the entry of generic versions of Provigil in violation of various antitrust and consumer protection laws. New York Attorney General Eric Schneiderman, who led the investigation, said in a press release:
When pharmaceutical companies put profits ahead of people by illegally restricting competition, it harms patients across our state. This misconduct, which drives up the cost of prescription drugs, will not be tolerated.
The settlement, which comes out of an escrow fund from Cephalon’s $1.2 billion settlement with the Federal Trade Commission (FTC) in May 2015, provides $90 million to the states and $35 million to consumers who were harmed by the conduct. The settlement is subject to court review and must get court approval. The antitrust litigation – which includes a number of suits brought by direct purchasers, end payors and the FTC – arises from a series of reverse payment settlements worth about $300 million that Cephalon reached with four generic-drug makers in 2005 and 2006 to resolve patent infringement litigation over the blockbuster narcolepsy treatment. The generics companies all sought approval to market their own versions of the drug on the same day, meaning that all four were eligible for the initial 180-day exclusivity window granted to first filers under the Hatch-Waxman Act. In April 2015, Cephalon, Barr and Teva agreed to pay $512 million to settle with the direct purchaser class Plaintiffs in the lawsuit styled King Drug Co. of Florence Inc. v. Cephalon Inc.
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