Commission sends Statement of Objections to Teva on ‘pay for delay’ pharma agreement

Background and further information:

Cephalon owned the patents for the drug and its manufacture. After certain Cephalon patents on the modafinil compound expired in the European Economic Area (EEA), Teva entered the UK market for a short period of time with a cheaper generic product.

Following a lawsuit concerning an alleged infringement of Cephalon's processing patents on modafinil, the companies settled their litigation in the UK and the US with a world-wide agreement. As part of this agreement Teva undertook not to sell its generic modafinil products in the EEA until October 2012. In exchange, Teva received a substantial transfer of value from Cephalon through a series of cash payments and various other agreements.

The Commission opened formal antitrust proceedings in April 2011.

The Statement of Objections alleges that the patent settlement agreement between Cephalon and Teva may have caused substantial harm to EU patients and health service budgets. This is because they may have delayed the entry of a cheaper generic medicine, leading to higher prices for modafinil.

The European Commission decided on 17 July 2017 to send a Statement of Objections to pharmaceutical company Teva with its preliminary view that a 'pay for delay' agreement with Cephalon was in breach of EU antitrust rules.

Under this agreement, Teva committed not to market a cheaper generic version of Cephalon's drug for sleep disorders, modafinil.

Reuters, 17.07.17: EU regulators charge Teva over pay-for-delay drug deal https://www.reuters.com/article/us-eu-teva-pharm-ind-antitrust-idUSKBN1A20WT

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