With four settlement agreements, the state of California will receive nearly $ 70 million dollars from pharmaceutical companies that allegedly cut illegal agreements to keep affordable generic drugs out of the market and protect expensive brand names from competition.
The settlements also include provisions that temporarily prevent drug makers from entering into such "pay-for-delay."
California Attorney General Xavier Becerra argued that the agreements violate the antitrust law and could cause consumers to pay as much as 90% more for prescription drugs.
“These dark, illegal, collusive agreements that drug companies not only think about price competition, but burden our families and patients ̵
The three companies involved – Teva Pharmaceutical Industries, Endo Pharmaceuticals and Teikoku Pharma – deny that the agreements are illegal and that they hurt consumers.
The four settlements involve two drugs: Provigil (a treatment for narcolepsy and other sleep disorders) and Lidoderm (prescription patch for shingles).
In the case of Provigil, Becerra claimed that Teva made four payment delay agreements with competitors to keep the monopoly on the sale of the drug from 2006 to 2012 Teva equalized and agreed to a 10-year prosecution and payment of $ 69 million. From this payment, $ 25,250,000 will be put into a fund to reimburse California residents who purchased the drug in that timeframe.
With regard to Lidoderm, Becerra argued that all three companies (Teva, Endo and Teikoku) worked together to postpone the release of a generic from the market. Endo and Teikoku, partners in the production of Lidoderm, have reportedly cut a multi-million dollar deal with a company bought by Teva to delay the release of a generic. Endo settled with California for $ 760,000 and agreed to an eight-year stay. Teikoku agreed to a 20-year stay.
Becerra's office noted that settlements include the largest payment to a state for "pay for delay" agreements. They also mark the first time a state has secured an injunction for agreements. The companies had already settled with the FTC about similar allegations related to both substances.