FTC Reaches Record $1.2 Billion Settlement Over Alertness Drug Provigil

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The Federal Trade Commission (FTC) announced Thursday that it had reached a settlement with Teva Pharmaceutical Industries in which the company will have to pay the agency $1.2 billion over allegations that its Cephalon subsidiary paid generic drugmakers to delay production of its sleep-disorder drug Provigil.

This kind of “pay-to-delay” scheme is anticompetitive and means drug purchasers pay more than they otherwise would, had the drug’s production by generic manufacturers been allowed sooner, said FTC Chairwoman Edith Ramirez during a teleconference.

The $1.2 billion sum, to repay “ill-gotten gains,” will be distributed to drug purchasers, such as wholesalers, pharmacies and insurers, Ramirez said.

The settlement is the largest the FTC has ever reached. It represents a “milestone in the FTC’s long-running campaign to stop deals in which brand name drug makers pay generic-drug competitors to drop patent lawsuits that could lead to the earliest possible market entry of lower-cost generic medicines,” The Wall Street Journal noted.

Provigil is a stimulant that doctors prescribe to treat sleep disorders like narcolepsy. However, many people use and abuse Provigil as a “smart drug” to stay up long hours, a trend that seems to be increasing on college campuses and in industry, according to io9, Gawker’s science and technology blog. Research shows the drug is less addictive than amphetamines, but it can still lead to dependence and addiction in some people if its use isn’t carefully supervised by a doctor.