Teva Settles Provigil Lawsuit for $512 Million

Despite agreeing to pay more than $500 million to settle a lawsuit stemming from pay-to-delay actions for its blockbuster narcolepsy drug Provigil, Israeli drugmaker Teva could still face billions more in court-ordered payments.

Teva agreed to pay $512 million to direct purchasers in a class action lawsuit following three rounds of mediation as part of settlement discussions lasting 22 months. In announcing the deal, the plaintiffs’ attorneys said the payout is more than double the previous largest recovery.

The plaintiffs filed an antitrust suit in April 2006 against Cephalon, which has since been acquired by Teva, claiming the company unlawfully delayed the availability of generic versions of Provigil through reverse payment agreements.

Once generic versions of Provigil (modafinil) from Teva, Ranbaxy, Mylan and Barr became available in 2012, purchasers quickly switched to the lower-priced drugs. Teva has since acquired Barr.

Excluded from the settlement in King Drug Co. of Florence, Inc., et. al. v. Cephalon, Inc. et. al. are Rite Aid, Eckerd, CVS Caremark, Walgreens and other pharmacy and supermarket chains.

A federal judge ruled that the Federal Trade Commission can pursue billions of dollars in repayments from Cephalon over its pay-to-delay tactics. That case, FTC v. Cephalon, is being heard in the U.S. District Court for the Eastern District of Pennsylvania and is scheduled for trial on June 1. — John Bechtel