Teva to pay California $69m over pay-for-delay deals

The state of California has secured a $69 million  settlement with  Teva, which allegedly entered into collusive pay-for-delay agreements with generic competitors.

According to the state’s  announcement, Teva maintained a monopoly over the market by “illegally” delaying affordable prescription drugs.

“These settlements include the largest pay-for-delay settlement received by any state and are also the only ones to secure injunctive relief for a state against future pay-for-delay agreements,” the announcement said.

California’s settlement with Teva concerns the six-year delay of a generic narcolepsy drug, Provigil (modafinil).

The state filed its original complaint against Cephalon, a biopharma company acquired by Teva in 2011.

California sought damages for “unlawful anticompetitive conduct to delay generic competition”. According to the complaint, Cephalon knowingly enforced an invalid patent on generic competitors.

It said Cephalon had obtained the patent through its “material omissions and misrepresentations to the US Patent and Trademark Office”.

“Despite knowing the patent was invalid and fraudulently procured, Cephalon filed patent infringement litigation against generic competitors seeking to manufacture generic Provigil,” the filing said.

The state’s attorney general, Xavier Becerra, said the settlements were evidence of California “pushing back on greedy drug companies”.

Becerra said: “These dark, illegal, collusive agreements that drug companies devise not only choke off-price competition but burden our families and patients—they force every Californian to shoulder higher prices for life-saving medication. It’s nothing less than playing with people’s lives.”

“Californians shouldn’t have to pay an arm and a leg to afford their prescriptions,” he added.

Teva said the settlement was not an admission or liability or wrongdoing.

California has also recently entered into settlements with  Endo and Japanese company Teikoku for preventing a generic version of a shingles medication, Lidoderm (lidocaine), from entering the market for almost two years.

Under the settlement, Endo will pay the state $760,000.

Teikoku, which was a partner in the production of Lidoderm, was given an injunction prohibiting it from entering into further pay-for-delay settlements for 20 years.

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