Teva Settles Nexium Pay-for-Delay Suit for $24 Million

June 19, 2015

Israeli drugmaker Teva will pay $24 million to settle a pay-for-delay lawsuit over its generic version of AstraZeneca’s heartburn relief drug Nexium.

Massachusetts federal Judge William G. Young approved the settlement, which resulted from an agreement drafted in April. Teva made no admission regarding the claims against it, and plaintiffs’ claims were dismissed.

The lawsuit does not include drugmakers AstraZeneca, Ranbaxy or Dr. Reddy’s Laboratories, which are alleged to have participated in the scheme to delay generic versions of Nexium getting to market. Dr. Reddy’s previously settled a similar lawsuit.

In December, a jury found that AZ and Ranbaxy, the two remaining defendants in the lawsuit, did not conspire to delay launching a generic version of Nexium when they signed a “no authorized generics” pledge in a 2008 settlement agreement. Earlier this month, plaintiffs sought an injunction against AZ and Ranbaxy as they seek a retrial.

Industry has paid close attention to the lawsuit In Re: Nexium (esomeprazole) Antitrust Litigation because it tests what kinds of patent infringement settlements are permissible following the Supreme Court’s 2013 ruling in the FTC v. Actavis antitrust case.

The plaintiffs had claimed AZ’s settlements amounted to cash transactions. AZ, however, contended that its deal with Teva involved waiving part of a debt that the generics maker owed the brand maker for a separate patent lawsuit and not a direct payment.

Under terms of Teva’s settlement, the plaintiffs are divided into direct purchaser, individual retailer and end-payer groups. The end-payer group will get $1 million, from which $5,000 incentive awards will be paid to each plaintiff. The other two groups will split the remaining funds minus fees and expenses, with 61 percent earmarked for direct purchasers and 39 percent for individual retailers.

In January, the FDA approved Teva’s plan to market a generic Nexium (delayed-release esomeprazole magnesium), snubbing Ranbaxy’s ANDA first-filer status over GMP violations at a plant in India.

Teva offered no comment on the settlement. — John Bechtel