Legal News

Cephalon to FTC: Delaying Generics Is Good for Consumer

By Dan Slater

Is it good for consumers when a drug-maker pays the competition to delay production of a competing generic drug that would cost 90% less than the brand-name?

That’s the argument that Cephalon — which makes best-selling narcolepsy medicine Provigil — is trying to make in the face of a lawsuit filed against it by the Federal Trade Commission. The civil complaint, filed in district court in Washington, alleges that Cephalon bought off four rivals — Teva, Ranbaxy, Barr and Mylan — for a combined $200 million in order to protect the sales of its $800 million-a-year drug until 2012. Here’s a story from WSJ.

A patent protects Provigil through 2015. Cephalon recently settled lawsuits with the generics makers by agreeing to let them come to market in 2012; in some cases, Cephalon purchased their supplies of generic Provigil.

Representatives for Teva, Ranbaxy and Mylan couldn’t be reached for comment. A Barr spokeswoman said the company believes that it is legal to negotiate such settlements and that doing so serves the best interests of consumers. “We think the settlement was proconsumer and procompetition because generic drugs will get onto the market three years earlier,” said Sheryl Williams, the spokeswoman.

Jeffrey Schmidt, the FTC’s competition chief, said that Cephalon derailed competition “by agreeing to share its future monopoly profits with generic-drug makers poised to enter the market.”

Commissioner Jon Leibowitz added that “pay-for-delay settlements, if not stopped, will continue to grow exponentially . . . . In this instance, they will cost patients taking Provigil — a crucial drug for those who suffer from narcolepsy and for members of the armed services in Iraq — more than a billion dollars through years of delayed competition.”

Full post as published by Law Blog - WSJ.com on February 14, 2008 (boomark / email).