April 20, 2015 / 2:55 PM / 4 years ago

CORRECTED-UPDATE 1-Teva to pay $512 mln to settle claims of delayed generic Provigil

(Corrects second paragraph to change consumers to direct purchasers)

By Brendan Pierson

April 20 (Reuters) - Teva Pharmaceutical Industries Ltd has agreed to pay $512 million to settle a class action claiming that Cephalon Inc, which Teva bought in 2011, used anticompetitive settlements to delay generic versions of its wakefulness drug Provigil, according to court papers.

The settlement is the largest ever to be paid to drug buyers that bought directly from manufacturers over allegations of delaying generic drugs, according to a motion to approve the settlement filed on Friday in Philadelphia.

Teva and an attorney for the plaintiffs could not immediately be reached for comment.

The lawsuit, filed in 2006 by drug wholesalers and retailers, claimed that Cephalon entered into settlements in patent lawsuits with Teva, Mylan Inc and Ranbaxy Laboratories Ltd to keep generic versions of Provigil off the market until 2012. The lawsuit said that the settlements violated federal antitrust law.

Mylan and Ranbaxy, which are also defendants in the case, are not part of the settlement, according to Friday’s motion.

The U.S. Federal Trade Commission also sued Cephalon over the settlements in 2008. A bench trial in that case is scheduled for June.

The case is King Drug Company of Florence Inc, on behalf of itself and all others similarly situated, v. Cephalon Inc et al, U.S. District Court, Eastern District of Pennsylvania, No. 2:06-cv-01797. (Reporting By Brendan Pierson in New York; Editing by Chizu Nomiyama and Meredith Mazzilli)

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