Teva Pharmaceutical to pay $1.2 billion over delaying generic drug makers

Teva Pharmaceutical Industries Ltd. has now agreed to pay $1.2 billion to settle Federal Trade Commision allegations that Cephalon, Teva’s subsidiary, paid generic-drug makers to delay competing generic versions of its of Provigil, its sleep disorder drug.

The FTC case is considered landmark because Teva us not the only company seeking to buy off generic drug makers, a phenomenon that harms consumers and generates profits only for the drug makers.

Also, the FTC will distribute the funds paid to drug purchasers, including wholesalers, pharmacies and insurers, who overpaid for the drug, the commission said.

The FTC Court papers said that Cephalon paid several generic-drug makers, including Teva, collectively more than $200 million to abandon challenges to the patent for Provigil and to refrain from selling generic versions of the drug until 2012. Those agreements force consumers and others to pay hundreds of millions of dollars more for the drug than they would have paid if inexpensive generic alternatives were available.

Jeffrey Newman represents whistleblowers