Teva to pay $69 million to settle sleep drug antitrust case with California

Teva Pharmaceuticals will pay $69 million to settle allegations from California's attorney general that it unlawfully delayed generic entry of the sleep drug Provigil.

Xavier Becerra, the California AG, made the announcement today at a press conference in San Francisco.

The latest settlement adds to the billion dollar-plus tab that drug companies have paid to settle both government and private litigation accusing them of conspiring to delay generic entry of the drug.

In 2015, the Federal Trade Commission settled with Cephalon for $1.2 billion over Provigil-related pay-for-delay claims (see here). Earlier this year, Teva, Mylan and Ranbaxy paid $66 million to settle related private claims over Provigil.

As part of the settlement with California, Teva is barred for 10 years from entering into new pay-for-delay agreements, and a $25 million consumer fund will be established for residents in the state.

Teva also settled with California over similar claims related to the shingles drug Lidoderm. No money was paid, but the 10-year injunction applies to the Lidoderm case as well.

Endo Pharmaceuticals previously settled with California over Lidoderm, paying $760,000. Earlier this month, Endo settled with a separate group of states, paying $2.3 million.

In February, a California lawmaker introduced state legislation to curb pay-for-delay agreements (see here). That law is working its way through the state legislature and hopefully will be ready for California Governor Gavin Newsom to sign into law in September, Becerra said today.

Becerra acknowledged drug companies are spending a "pretty good chunk of money" to lobby against the bill, but said it is necessary to keep drug prices low.

The bill would make pay-for-delay agreements presumptively unlawful, though drug companies would still be allowed to argue the legality of their actions. Federal lawmakers have been trying to pass similar legislation for years.

Ultimately, individual accountability, including prison sentences will be the only way to counter illegal activity at pharmaceutical makers and other companies, Becerra said.

The settlements today were civil, but Becerra said "if you’re a criminal dressed in a nice suit, there's a cell that should be waiting for you."