Attorney General Announces $125M Multistate Settlement with Pharmaceutical Company

West Virginia Attorney General Patrick Morrisey last week announced a $125 million, 48-state lawsuit and settlement with Cephalon and affiliated companies.
The settlement ends a multistate investigation into Cephalon’s anticompetitive practices. The states contend its conduct protected monopoly profits earned from its landmark narcolepsy-treating, wakefulness drug, Provigil.
West Virginia’s share of the settlement will exceed $826,000. That will cover the state’s claims, fees and costs. Additionally, consumers will be able to make claims for approximately $360,000 as part of a multistate claims process.
“This settlement provides a path for consumers to recoup money lost by the absence of competition,” Morrisey said.
The states allege Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent and delay generic drug competition. The alleged conduct involved its filing of patent infringement lawsuits against all potential generic competitors.
Cephalon subsequently settled those lawsuits in 2005 and early 2006 by paying its competitors to delay sale of generic versions of Provigil until at least April 2012.  In turn, consumers, states, and other stakeholders paid hundreds of millions more for Provigil than if a generic version had been available by early 2006.
The multistate investigation was facilitated by litigation brought against Cephalon by the Federal Trade Commission. It led to Cephalon agreeing to pay $1.2 billion into a settlement fund from which the company could settle other litigation regarding conduct, such as the 48-state settlement.
This week’s settlement is subject to court review with a final hearing expected later this fall.
Defendants named in the settlement are Teva Pharmaceuticals USA Inc. and its parent company, Teva Pharmaceutical Industries Ltd., along with subsidiaries Cephalon Inc. and Barr Laboratories Inc.
As part of the settlement, each defendant denies any allegation of unlawful conduct and denies they caused any damage.