The attorney-generals of New York and Ohio won a settlement with Cephalon, Inc. Cephalon is the pharmaceutical company that invented modafinil. If you purchased name-brand Provigil, or generic Provigil, then you may be eligible for a piece of the pie.
So what actually happened? The $35 million dollar deal was cut behind closed doors, and Cephalon never admitted any wrongdoing. It has to do with US antitrust law and how it works. You can read the full statement here.
Cephalon’s not alone in the lawsuit
Cephalon’s not the only company mentioned. Barr Pharmaceuticals is also on the lawsuit. So is Teva Pharmaceuticals. So how are they connected?
Cephalon’s patent to produce modafinil exclusively was going to expire in 2011. To prepare Barr applied early for FDA approval to produce it. Filing the application early gave Barr time to prepare its facilities for production when the patent eventually would expire. They received permission in 2004.
The lawsuit says Teva skirted the rules
Teva Pharmaceuticals acquired Barr in 2008. Now its Teva vs Cephalon. In the same year as Cephalon’s patent expired, Teva made a bold move. Teva purchased Cephalon in 2011. This meant that Teva would be both a licensed producer of generic modafinil, and the name brand Provigil. Teva event went so far as to apply for a license separate from Barr’s and received it in 2014.
The lawsuit says Teva skirted the rules, because they absolutely did.
This is illegal because it disrupts the market. In a natural market, the generic manufacturer would sell their pills as cheap as possible to encourage customers to stop taking the name brand. But since Teva controlled generic production, they could sell it at a price much closer to the regular price of Provigil. Instead of seeing a massive price difference, customers would see a smaller one, and opt for the name brand drug.
People assume the name brand is better. They are, but not by much.
This lawsuit aims to get some of that money back. The generic should have been cheaper. And that should have caused Cephalon to lowers its Provigil prices. Neither of these things happened.
The attorney-generals’ settlement probably is a tiny fraction of what Teva actually made. Over a million Provigil prescriptions are filled out every year, so a simple $5 increase in price pays for this settlement. The actual difference may have been much more, but to avoid disclosing that information, Teva and Co. have decided to settle this lawsuit out of court.
If you’d like to know if you are eligible for any benefits from the settlement, check out the lawsuit’s page.