|(COLUMBIA, S.C.) – February 13, 2018 — In South Carolina, 868 residents will be receiving checks as part of a lawsuit settlement, Attorney General Alan Wilson announced today. The money is going to people who used the brand-name drug Provigil or its generic equivalent modafinil from June 24, 2006 to March 31, 2012.
Provigil, which includes the active ingredient modafinil, is approved by the federal Food and Drug Administration (FDA) to improve wakefulness in adult patients with excessive sleepiness associated with narcolepsy, obstructive sleep apnea, and shift work disorder.
In August 2016, Attorney General Wilson and 47 other state attorneys general announced the settlement with biopharmaceutical company Cephalon and its affiliated companies, including Teva Pharmaceutical Industries, Teva Pharmaceuticals USA and Barr Laboratories. That settlement resolved allegations that the companies engaged in unlawful “pay-for-delay” anticompetitive conduct involving the patent exclusivity for Provigil.
The settlement included $35 million to compensate eligible consumers who may have been harmed by the alleged conduct. South Carolina received $1,883,870.27, which includes funds for the Public Employee Benefit Authority, and to reimburse the state and federal Medicaid programs.
While the settlement was announced in 2016, consumers who used the products had to go through a claims process. Now that the claims process has been completed, checks are being mailed this week. South Carolina will receive $802,587.05 for consumers, which will be split between 868 users of the medications who qualified to be members of the settlement.
“We joined this lawsuit to protect South Carolinians who were taken advantage of,” says Attorney General Wilson. “Because of this pharmaceutical company’s unlawful conduct, people in this state paid more than they should have for these medications. I’m proud of the work the people in my office did to get restitution for the people of this state.”
“Pay for delay” conduct occurs when a branded drug company seeks to unlawfully maintain its exclusive rights by paying a would-be generic competitor to delay entry into the market and thus keep prices at artificially high levels.
As the patent for Provigil neared expiration in 2001, the states alleged that Cephalon intentionally misled the United States Patent & Trademark Office (PTO) in order to secure an additional patent for the purpose of preventing competition. By misleading the PTO, Cephalon was able to obtain FDA exclusivity for modafinil until June 2006, and extend patent exclusivity until April 2012. A court subsequently deemed the additional patent invalid and unenforceable, but prior to that ruling, Cephalon was able to delay generic competition for over a decade by filing patent infringement lawsuits against all potential generic competitors.
Cephalon later settled lawsuits with its generic competitors in 2005 and early 2006 by paying them to delay the sale of their generic versions of Provigil until at least April 2012 – six years after expiration of FDA exclusivity but three years before patent expiration. The delayed entry cost consumers, states and others hundreds of millions more for Provigil than if generic versions of the drug had launched by early 2006, as expected.