Teva to pay whopping $512 million fine in Provigil pay-to-delay suit
- The class-action lawsuit accusing Teva of illegally stopping sales of generic Provigil (modafinil) has ended after 10 years.
- Cephalon, which was acquired by Teva in 2011, agreed to settle this antitrust case, after requesting that a federal judge in Philadelphia throw out the claims and being denied.
- According to the U.S. Federal Trade Commission, pay-for-delay agreements between brand-name and generics manufacturers cost $3.5 billion per year.
Although the federal court determined that Cephalon was engaging in anti-trust activities, the company countered that what is being called 'pay-for-delay' tactics actually represents a way to settle patent litiigation. The back story is that Cephalon reached four patent accords with generic manufacturers to put off introduction of generic modafinil until 2012. Based on court filings, companies that bought the drug for resale between June 24, 2006 and August 31, 2012 are now eligible to receive settlement payments.
This approach to pay-for-delay suits is relatively new, starting with the U.S. Supreme Court decision in 2013 to reverse a lower-court ruling that insulated pharma companies from liability for this type of anti-trust activity.