Teva, Cephalon Fined $72 Million by EU for Pay-for-Delay Pact

Teva Pharmaceutical Industries Ltd. and its Cephalon unit were fined 60.5 million euros ($72 million) by the European Union for a pact that delayed sales of a cheaper version of a sleep-disorder drug.

Teva received cash payments and struck beneficial commercial side deals with Cephalon that stopped it rolling out a generic version of Cephalon’s modafinil medicine, the European Commission said in an emailed statement on Thursday. Their pay-for-delay pact lasted from 2005 until 2011, when Teva bought Cephalon for $6.2 billion.

“Teva’s and Cephalon’s pay-for-delay agreement harmed patients and national health systems, depriving them of more affordable medicines,” said EU Competition Commissioner Margrethe Vestager. “It is illegal if pharmaceutical companies agree to buy-off competition and keep cheaper medicines out of the market.”

Antitrust regulators on both sides of the Atlantic have levied millions of dollars in penalties over agreements between companies that make branded medicines and generics producers. Such deals prevent customers buying cheaper versions of drugs as they come off patent.

The EU said Teva’s share of the total fine was 30 million euros, while Cephalon’s was 30.5 million euros.

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