Teva, FTC enter expanded settlement barring certain 'pay-for-delay' deals for 10 years

Teva has already had to pony up $1.2 billion to the federal government for a "pay-for-delay" deal to protect narcolepsy drug Provigil. But now the government says that settlement didn't go far enough, and the parties returned with an expanded arrangement designed to keep Teva from working the same type of arrangement from another angle.

The generics giant won’t hand over any cash in the new settlement but will be barred from entering into the "two most pernicious and common forms of reverse payments," the FTC said, including commitments to not compete against authorized generics. Previously, the company entered into a settlement that didn't prohibit such arrangements, according to the FTC. The newer settlement also prohibits "side deals," or payments to generics companies around the time of a resolution of a patent case.

In all, the agency says the new order is broader than the previous agreement and will restrict Teva from making such deals for 10 years. The FTC said the move "provides immediate relief to consumers" without the costs of litigating cases against Teva.

Along with the agreement, the FTC is moving to drop three pay-for-delay cases. In the first case, the commission sued in 2009 over delays for generics to AbbVie’s AndroGel thanks to an agreement with Watson, which is now a unit of Teva. A court previously dismissed the case, but the Supreme Court reversed the decision and found that reverse-payments can violate antitrust laws, according to FTC. The case had been set for a trial next month.

In the second case, the FTC sued in 2017 over delays to Lidoderm generics after a deal between Endo and Watson. Endo has settled its portion of that case with the FTC and is also under a 10-year order barring "pay-for-delay" agreements.

The third case also involves AndroGel and alleges a reverse-payment deal between AbbVie and Teva. The government also said AbbVie filed "baseless" patent infringement suits to delay generic competition. A court dismissed the reverse-payment claim in 2015, and the decision is under appeal. 

For Teva, the company says the new decree makes clear what type of patent settlements the government considers appropriate. 

"We also appreciate the FTC's willingness to modify our consent decree to eliminate certain administrative burdens that will make it easier for us to navigate the patent issues that are critical to our business," Brendan O’Grady, Teva’s EVP and Head of North America Commercial, said in a statement. 

So-called pay-for-delay deals have long irked federal officials and lawmakers, and the FTC has been working to get tough on the arrangements in recent years. In 2015, the agency secured a massive $1.2 billion settlement with Teva’s Cephalon unit over delays to narcolepsy med Provigil. 

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