PHILADELPHIA Federal regulators sued Cephalon Inc. on Wednesday, accusing the company of illegally blocking the sale of low-cost generics to protect its biggest money-making drug.
The U.S. Federal Trade Commission has accused Cephalon of "anti-competitive conduct" by inhibiting generic competition against its drug Provigil. Regulators said the company paid four pharmaceutical firms more than $200 million to halt sales of generic versions of Provigil until 2012. Cephalon produces several products in Salt Lake City, including Actiq.
Provigil, which accounts for about half of Cephalon's total sales, treats excessive sleepiness in patients with sleep apnea, narcolepsy and shift-work sleep disorder.
"Cephalon prevented competition to Provigil by agreeing to share its future monopoly profits with generic drugmakers poised to enter the market, in exchange for delayed generic entry," FTC Bureau of Competition director Jeffrey Schmidt said in a statement. "Such conduct is at the core of what the antitrust laws proscribe."
But Cephalon defended its agreements, saying the deals reached in late 2005 and early 2006 settled patent infringement litigation.
"We believe they fully comply with both the spirit and letter of the antitrust laws," the company said in a statement.
Cephalon also said the settlements "confer a meaningful benefit to U.S. consumers by providing for the entry of generic modafinil three years early."
The FTC said the four drugmakers had been preparing to market their own generic versions of Provigil or had challenged the validity of the only remaining patent on the drug.
With Cephalon's settlement, the FTC said, it was able to get the drugmakers to stop the patent challenge. The four pharmaceutical firms are Teva Pharmaceuticals USA Inc., Ranbaxy Pharmaceuticals Inc., Mylan Pharmaceuticals Inc. and Barr Laboratories Inc.
Shares of Frazer-based Cephalon fell $1.03 to $57.44 on Wednesday.