Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Cephalon allegedly conspired to delay generic Provigil, maintain monopoly, (Aug 2, 2016)

By Greg Hammond, J.D.

Cephalon, Inc. engineered a scheme to monopolize the market for Provigil by delaying the entry of lower-cost, generic versions of the drug, according to a complaint filed in the federal district court in Minneapolis. Cephalon also allegedly conspired with other pharmaceutical companies to delay entry of generic Provigil, in violation of Minnesota Antitrust Law (United Healthcare Services, Inc. v. Cephalon, Inc., July 28, 2016).

Provigil is marketed for the treatment of various sleep disorders, including narcolepsy. United Healthcare Services, Inc. is engaged in prescription drug managed care programs that it provides to members and beneficiaries under insurance plans, and allegedly paid several hundred million dollars for Provigil in Minnesota.

United claims that Cephalon’s scheme to monopolize the market for Provigil, by delaying the entry of generic versions of the drug, included: (1) obtaining a patent related to Provigil through fraudulent conduct before the U.S. Patent & Trademark Office; (2) commencing and prosecuting sham litigation to enforce one of the fraudulently obtained reissued patents; and (3) coordinating a series of "pay-for-delay" settlement agreements in which Cephalon paid approximately $300 million to four potential generic competitors—including Barr Pharmaceuticals, Inc., Mylan Laboratories, Inc., Ranbaxy Pharmaceuticals, Ltd., and Teva Pharmaceutical Industries, Ltd.—to delay their entry to market for approximately six years.

The complaint alleges that Cephalon violated Minnesota Antitrust Law by willfully maintaining its monopoly power in the relevant market using restrictive or exclusionary conduct, and attempting to monopolize the market. In addition, Cephalon, Barr, Mylan, Ranbaxy, and Teva purportedly violated Minnesota Antitrust Law by conspiring in restraint of trade to allocate sales of Provigil in the United States to Cephalon; prevent the sale of a generic version of Provigil in the United States, thereby protecting Provigil from any generic competition for more than six years; and fix the price for Provigil at a supracompetitive price.

United seeks damages and treble damages, attorney fees and costs, pre- and post-judgment interest, a monetary award in the amount the pharmaceutical company defendants have been unjustly enriched, and a permanent injunction prohibiting the pharmaceutical companies from continuing, maintaining, or renewing the conspiracy, or adopting any practice that has a similar purpose or effect in restraining competition.

The case is No. 0:16-cv-02563-MJD-BRT.

Attorneys: Rory D. Zamansky and Judith A. Zahid (Zelle LLP) and Hamish P. M. Hume and Philip J. Iovieno (Boies, Schiller & Flexner LLP) for United Healthcare Services, Inc.

Companies: United Healthcare Services, Inc.; Cephalon, Inc.; Barr Pharmaceuticals, Inc.; Mylan Laboratories, Inc.; Ranbaxy Pharmaceuticals, Ltd.; Teva Pharmaceutical Industries, Ltd.

News: Antitrust MinnesotaNews