Georgia, other states settle with Provigil manufacturer

ATLANTA — Attorney General Sam Olens has announced that Georgia has joined 47 other states in a $125 million settlement with drug manufacturer Cephalon and affiliated companies, now part of Teva Pharmaceutical Industries.

The settlement ends a multistate investigation into anti-competitive conduct by Cephalon to protect the monopoly profits it earned from its landmark wakefulness drug, Provigil, the attorney general’s office said. Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years, officials contend.

The settlement includes $35 million for consumers who bought the drug. Georgia’s recovery will be slightly more than $2 million — $300,020 for Provigil purchases by state entities or off state contracts; slightly less than $1.24 million for distribution to Georgia consumers for payments for Provigil, and $503,566 for Georgia’s share of costs.

This multistate settlement was facilitated by litigation brought against Cephalon by the FTC, Olens’ office said. The settlement is subject to federal court review.

Olens’ office said that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable.

Before that court finding, the attorney general’s office said, Cephalon was able to delay generic competition for nearly six years by filing patent infringement lawsuits against all potential generic competitors. Cephalon settled those lawsuits in 2005 and early 2006 by paying the generic competitors to delay sale of their versions of Provigil until at least April 2012. Because of that delayed entry, consumers, states and others paid hundreds of millions of dollars more for Provigil than they would have had generic versions of the drug launched by early 2006 as had been expected, Olens’ office said.

In May 2015, the Federal Trade Commission settled its suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations, such as those of the 48 states.

Officials with the 48 states expect court review will be provided by Judge Mitchell Goldberg of the Eastern District of Pennsylvania, who is overseeing other litigation concerning Provigil against Cephalon and others, Olens’ office said.