Drug maker Cephalon sanctioned for paying competition not to make generic version of Privigil

A new scheme has entered the pharmaceutical industry involving what the courts have now deemed as illegal payoffs in which drug-makers holding patents, sue generic manufacturers then settle the case paying millions to keep them from making the less expensive version.

Pharmaceutical manufacturer Cephalon was sanctioned by the Federal Trade Commission for the so called “reverse payment” settlements the company struck with competing drug makers to stop them from making generic versions of the narcolepsy drug Provigil.

The problem  with companies doing this, says the FTC is that it harms consumers through delayed entry of generic drugs into the market, which are far less expensive. In some cases where the drugs were ultimately billed to Medicare, Pharma companies, including Cephalon have been charged with fraud under The False Claims Act. This is because when the generic drug is kept from the market, Medicare, which is your tax dollar, pays a much higher price for the medications.  There is a False Claims Act case against Cephalon that is pending at this time.

Jeffrey Newman represents whistleblowers