FTC Demands $4 Billion from Cephalon Over Pay-for-Delay Deals
The FTC is demanding Cephalon pay as much as $4 billion as punishment for profiting illegally from pay-for-delay deals that put off generic versions of the company’s wakefulness drug Provigil from 2006 to 2012.
With a June trial date looming in the case, Cephalon and its fellow generics defendants asked the court to reject the idea of financial damages, arguing that the focus of the government’s case was to force generic Provigil on the market, which occurred in 2012. At that point, Cephalon argues, the government’s claims were resolved.
The FTC is sticking to its guns, however. In a Feb. 17 filing the commission argues that forcing a generic on the market was only part of the relief it sought. Now the focus has shifted to getting relief for money consumers and insurance companies had to pay for branded Provigil before generics came to the market.
If Cephalon loses to the FTC, the money will go into a consumer relief fund for claimants who say they overpaid for branded Provigil (modafinil). The case, FTC v. Cephalon, is being heard in U.S. District Court for the Eastern District of Pennsylvania.
The FTC’s suit, first filed in 2008, survived an important challenge from Cephalon late last month, when the district court judge ruled that the commission need only show that a payment made in a patent infringement settlement could potentially qualify as an anticompetitive pay-for-delay deal.
Cephalon had argued that the Supreme Court’s 2013 ruling in FTC v. Actavis required a “threshold” of a large and unjust reverse-payment to warrant antitrust scrutiny. But the judge said Actavis established no such threshold and it is up to a jury to decide whether the approximately $300 million in payments to generics makers were pro- or anticompetitive.
Observers have watched the Cephalon case closely for signs of how Actavis will affect pay-for-delay lawsuits. — Bryan Koenig