California Fines Pharmaceutical Companies $70 Million for Colluding to Keep Generics Off the Market

Several pharmaceutical companies will have to pay nearly $70 million to the state of California for colluding to keep generic drugs off the market and raising drug prices, according to an announcement from state Attorney General Xavier Becerra.

The companies involved were found to be participating in “pay-for-delay” agreements, allowing drug makers to retain their monopoly on branded medications after their patents expired, according to Mr. Becerra. These practices led to consumers paying “as much as 90% more for drugs shielded from competition,” he added.

The agreement reached with pharmaceutical company Teva is “the largest pay-for-delay settlement received by any state,” Mr. Becerra noted. The company will pay $69 million to settle charges for keeping a generic form of the narcolepsy drug Provigil from entering the market for nearly six years; $25 million of the settlement will be used to create a consumer fund for Californians who purchased Provigil between 2006 and 2012.

Overall, four settlements were reached with Teva Pharmaceutical Industries, Endo Pharmaceuticals, and Teikoku Pharma.

Teva has stated that it will not be making any new payments for this settlement. Instead, the money will come from a pre-existing fund from an earlier settlement brought by the United States Federal Trade Commission (FTC) involving similar claims. If the FTC fails to disburse these funds, Teva will be responsible for paying the $69 million for the California settlement.

Source: CNN, July 29, 2019.

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