Generic drug firm settles claim that it was paid to stay out of market

A big manufacturer of generic drugs has had to pay $512m (£340m; €470m) to settle a claim that it took payments in various guises from the drug company Cephalon in exchange for not producing a cheap generic version of the company’s best selling drug.

Teva was one of four generic drug makers named in an antitrust suit brought by a large group of bulk drug buyers, pharmacies, and US health insurance plans over an alleged scheme to avert generic competition for the sleep disorder drug modafinil (marketed in the United States as Provigil).1 The other manufacturers, Ranbaxy, Mylan, and Barr Pharmaceuticals, remain defendants in the suit. The same alleged scheme is the subject of a separate suit by the Federal Trade Commission against Cephalon, due to be heard in June.

Provigil’s main patent expired in 2003, but the drug’s maker, Cephalon, still held minor patents related to particle size of the active ingredient. Generic …