False Claims Counsel

On July 29, 2019, California’s Attorney General announced four settlements with pharmaceutical companies related to suits alleging increasing drug costs and delaying competition. The Press Release states:

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California Attorney General Xavier Becerra today announced four settlement agreements against pharmaceutical companies for entering into collusive “pay-for-delay agreements” that illegally delay affordable prescription drugs from entering the market. Together, the settlements will result in these pharmaceutical companies making a nearly $70 million payment to the state. These settlements include the largest pay-for-delay settlement received by any state and are also the only ones to secure injunctive relief for a state against future pay-for-delay agreements. Pay-for-delay agreements allow a brand name drug company to continue its monopoly of a branded drug and to charge consumers higher prices.

The first settlement with Teva addresses anticompetitive pay-for-delay agreements that delayed a generic narcolepsy drug, Provigil, from entering the market for almost six years. The three other settlements with Teva, Endo Pharmaceuticals, and Teikoku address similar practices that prevented a generic version of the drug Lidoderm, a shingles medication, from entering the market for almost two years. Pay-for-delay agreements are costly to consumers and the healthcare market, causing consumers to pay as much as 90% more for drugs shielded from competition.

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Pay-for-delay agreements occur when name brand and generic drug companies avoid litigation by agreeing that the brand name will compensate the generic to keep it from entering the marketplace with its generic version of the brand name drug for a period of time. The four settlements announced today, include:

• Provigil Settlement: Attorney General Becerra argued that Teva delayed entry of generic competition through four pay-for-delay agreements that illegally maintained its monopoly over Provigil sales between 2006 and 2012. This resulted in artificially high costs of Provigil for consumers. As a result, Attorney General Becerra secured $69 million for California and a 10-year injunction prohibiting Teva from entering into pay-for-delay agreements. As part of the $69 million settlement, a $25,250,000 consumer fund will be created for California residents who purchased Provigil, Nuvigil or Modafinil during this timeframe. Consumers can learn more details here. In addition, the money from the settlement will be used to strengthen Attorney General Becerra’s investigative and enforcement work in cases like these to protect affordable, quality healthcare for all Californians.
• Lidoderm Settlements: Attorney General Becerra argued that Teva, Endo Pharmaceuticals, and Teikoku entered into pay-for-delay agreements regarding Lidoderm, a medical patch to relieve shingles pain. In June 2019, Attorney General Becerra settled with Endo Pharmaceuticals, securing an eight-year injunction against further pay-for delay agreements and payment of $760,000. Attorney General Becerra also secured a 20-year injunction against Teikoku, a partner in the production of Lidoderm with Endo.

 

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The settlement agreement is available on the state Attorney General’s website.