Pharma companies to pay California $70m for drug delays

California Attorney General Xavier Becerra has announced that Teva Pharmaceuticals, Endo Pharmaceuticals and Teikoku will pay almost $70 million to settle four cases including where generic versions of Provigil (modafinil) and Lidoderm (lidocaine) were delayed from entering the market.

One of the settlements involves Teva accepting payments to prevent generic versions of Provigil from entering the market from June 2006 to December 2012. As part of this $69 million settlement (the largest pay-for-delay settlement received by any state, Becerra says), which includes a 10-year injunction prohibiting Teva from entering into pay-for-delay agreements, California will set up a more than $25 million consumer fund for California residents who purchased Provigil or related medications Nuvigil (armodafinil) or Modafinil. 

Such ‘pay-for-delay’ agreements let the developer of brand name drugs keep their monopolies over the drugs after their patents expire, thereby letting them continue to charge consumers higher prices. The drug developer pays the generic manufacturer to keep the cheaper version of the drug from entering the marketplace for an agreed period of time.

As reported by Market Watch, Becerra said such agreements can force consumers and the health care market to pay as much as 90 percent more than if there were generic alternatives.  “No one in America should be forced to skip or ration doses of medicine that they need… and certainly not because a drug company is colluding to keep the price of your drug artificially high even when cheaper options could be available. But that’s what’s happening,” Becerra continued.

The second, $760,000 settlement is with Teva, Endo Pharmaceuticals and Teikoku Seiyaku unit Teikoku Pharma USA over keeping a genetic alternative to the pain patch Lidoderm from entering the market for nearly two years. Becerra also secured a 20-year injunction against Teikoku, a partner with Endo in the production of Lidoderm.

Both settlements bar the companies from pay-for-delay agreements for several years. Teva is agreeing to not to enter any such agreements for 10 years, while Endo Pharmaceuticals has an eight-year agreement and Teikoku a 20-year injunction.