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US: Connecticut joins $125 million antitrust settlement with Cephalon

By  |  August 15, 2016

Attorney General George Jepsen announced today that Connecticut has joined 48 other states and the District of Columbia in a $125 million settlement with biopharmaceutical company Cephalon and its affiliated companies, including Teva Pharmaceutical Industries, Teva Pharmaceuticals USA and Barr Laboratories. The settlement resolves allegations of anticompetitive conduct by Cephalon concerning its drug, Provigil. The conduct at issue is referred to as “pay for delay”, where a branded drug company sought to unlawfully maintain its exclusive rights by paying the would-be generic competitor to delay entry into the market and thus keep prices at artificially high levels.

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    Modafinil, the active ingredient in Provigil, is approved by the Food and Drug Administration (FDA) to improve wakefulness in adult patients with excessive sleepiness associated with narcolepsy, obstructive sleep apnea and shift work disorder.

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    As the patent for Provigil neared expiration in 2001, Cephalon intentionally mislead the United States Patent & Trademark Office (PTO) in order to secure an additional patent for the purpose of preventing competition. By misleading the PTO, Cephalon was able to obtain FDA exclusivity for modafinil until June 2006, and extend patent exclusivity until April 2012. A court subsequently deemed the additional patent invalid and unenforceable, but prior to that ruling, Cephalon was able to delay generic competition for over a decade by filing patent infringement lawsuits against all potential generic competitors.

    Cephalon later settled lawsuits with its generic competitors in 2005 and early 2006 by paying them to delay the sale of their generic versions of Provigil until at least April 2012 – six years after expiration of FDA exclusivity but three years before patent expiration. The delayed entry cost consumers, states and others hundreds of millions more for Provigil than if generic versions of the drug had launched by early 2006, as expected.

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