Mylan agreed to pay $96.5 million in Provigil antitrust class action

By Brendan Pierson

(Reuters) – Mylan NV has agreed to pay $96.5 million to settle claims by drug purchasers that it delayed launching a generic version of Cephalon Inc’s narcolepsy drug Provigil in exchange for payment from Cephalon.

The settlement was disclosed in a filing by the drug purchasers in Pennsylvania federal court on Friday, and must still be approved by the court.

The money will go to purchasers that bought brand-name Provigil from Cephalon directly, like wholesalers and distributors.

Mylan spokeswoman Nina Devlin said in an emailed statement that the settlement was not an admission of wrongdoing.

“Mylan believes the proposed settlement is in the best interests of the company and is an important step in moving forward,” she said.

Shares of Mylan were up 2 percent at $40 in early afternoon trade on the Nasdaq.

A group of direct purchasers sued Mylan, Cephalon and two other companies – Teva Pharmaceutical Industries Ltd and Ranbaxy Laboratories Ltd – in 2006. They brought their case on behalf of a nationwide class of direct purchasers.

The purchasers said Cephalon reached settlements in patent lawsuits it brought against Teva, Mylan and Ranbaxy in which it paid them to keep generic versions of Provigil off the market until 2012. The lawsuit said the settlements, reached in 2005 and 2006, violated federal antitrust law.

Teva bought Cephalon in 2011. In April 2015, it settled with the direct purchasers for $512 million.

In May 2015, it agreed to pay $1.2 billion to settle similar claims by the U.S. Federal Trade Commission, which had separately sued Cephalon over the Provigil settlements.

The agency has long criticized so-called “pay-for-delay” settlements in which brand-name drugmakers pay their generic counterparts to keep drugs off the market.

Ranbaxy is not a party to the settlement announced on Friday.

The case is King Drug Company of Florence Inc, on behalf of itself and all others similarly situated, v. Cephalon Inc et al, U.S. District Court, Eastern District of Pennsylvania, No. 2:06-cv-01797.

(Reporting by Brendan Pierson in New York; Editing by Dan Grebler, Bernard Orr)