Cephalon to Pay North Carolina Consumers Due to Practice of Blocking Generic Drugs

nearly $3 million will go to reimburse state agencies that purchased wakefulness drug Provigil

Cephalon to Pay North Carolina Consumers Due to Practice of Blocking Generic Drugs
Image: Pixabay
August 5, 2016

Pharmaceutical company Cephalon will pay a hefty price for its practice of market manipulation.

As the result of a lawsuit litigated by the Federal Trade Commission (FTC), the company will pay $125 million to resolve allegations that it illegally kept generic versions of its popular wakefulness drug Provigil off the market to boost profits. More than $5 million will go to consumers in North Carolina, according to North Carolina Attorney General Roy Cooper.

"Rigging the marketplace so that drugs cost more than they should harms patients," Cooper said in a written statement. "My office will continue to hold pharmaceutical companies accountable when they abuse the law."

Cooper and 48 additional attorneys general allege that Cephalon prevented competition against Provigil for nearly six years by intentionally defrauding the Patent and Trademark Office to secure an additional patent on the drug. Cephalon then repeatedly thwarted competition by filing patent infringement lawsuits, which they settled by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. As a result, consumers, hospitals, and government agencies paid hundreds of millions of dollars more for Provigil than they would have if generic versions of the drug had been available sooner.

Of the $5 million to North Carolina, about $1.2 million will be delivered to consumers who paid these artificially inflated prices, while nearly $3 million will go to reimburse state agencies that purchased Provigil.

In May 2015, the FTC settled its suit against Cephalon for injunctive relief and $1.2 billion. These funds were paid into an escrow account earlier this year to be distributed to resolve certain related cases and investigations, including today's settlement.

Additional information on how eligible consumers can apply for refunds will be available in coming weeks.