Teva settles in pay-for-delay class action case over sleeping tablet

Israel-based Teva Pharmaceutical Industries (NYSE: TEVA) has agreed a $512 million settlement in a class-action law suit in which a company it owns was accused of delaying the launch of Provigil (modafinil).

Cephalon, which was acquired by Teva in 2011 for $6.8 billion, was accused of entering into pay-for-delay agreements with generic drugmakers to keep generic formulations of Provigil off the market until 2012. The law suit was originally filed with drug wholesalers and retailers in 2006.

Denise Bradley, a spokeswoman for Teva, said the company is “pleased with the terms of the settlement.” This settlement amount represents the largest payment ever to drug buyers over claims that companies initially sought to delay generic therapies’ entrance to the market. According to court documents, Mylan and Ranbaxy are not included in the settlement.