EU regulators accuse Teva of entering pay-for-delay deal over generic Provigil

The European Commission on Monday disclosed that it has charged Teva of breaching antitrust laws in its deal with Cephalon to delay the launch of a generic version of the latter's sleep disorder therapy Provigil (modafinil). The Commission argued that Teva received "a substantial transfer of value" from Cephalon in exchange for an agreement to delay selling a generic version of Provigil as part of a settlement of a patent infringement lawsuit. "The patent settlement agreement between Cephalon and Teva may have caused substantial harm to EU patients and health service budgets," the Commission stated. 

The European Commission noted that Teva initially launched its generic product in the UK for a short period of time, while the company later agreed to delay the launch of a generic version of Provigil in the European Economic Area until October 2012 in exchange for cash payment and other benefits. The Commission alleges that the transferred value was an inducement for Teva to not compete with the branded product on a global basis. 

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"Our preliminary finding is that Teva and Cephalon broke EU antitrust rules by agreeing on Cephalon paying Teva to keep its cheaper generic version of Cephalon's sleep disorder drug [Provigil] out of the market," remarked Margrethe Vestager, Commissioner in charge of competition policy, adding "it's now up to the companies to respond to our concerns."  Teva said that it strongly disagreed with the Commission, adding "we do not believe that Cephalon and Teva entered into any anti-competitive behavior." 

Under European rules, Teva, which acquired Cephalon in 2011, could face a penalty of as much as 10 percent of global revenue if the allegations are confirmed. Teva previously agreed to pay $1.2 billion to resolve antitrust claims in the US that the company's Cephalon unit illegally blocked generic competition of Provigil, while the Israeli drugmaker additionally settled a class-action lawsuit regarding the matter for $512 million. 

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