United Health Settlement Ends 13-Year Provigil Saga (Corrected)

July 26, 2019, 7:16 PMUpdated: July 29, 2019, 4:14 PM

The long-running antitrust saga involving alleged efforts to block generic competition for the wakefulness drug Provigil appears to have reached its conclusion.

Insurance giant United Healthcare Services Inc.'s lawsuit against six drug companies was dismissed July 26 by Judge Mitchell S. Goldberg of the U.S. District Court for the Eastern District of Pennsylvania, who oversaw the multidistrict litigation.

United settled on undisclosed terms with the remaining defendants, Mylan Laboratories Inc. and Sun Pharmaceutical Industries Ltd., according to Goldberg’s order.

United appears to have been the last plaintiff out of hundreds that accused Cephalon Inc. of resolving its patent infringement suits against other drugmakers by paying them not to roll out generic Provigil. The Federal Trade Commission made similar allegations.

Such “reverse payments” from plaintiffs to defendants were once considered incidental to the “limited monopoly” conferred by a patent, but the U.S. Supreme Court opened them up to antitrust scrutiny in 2013’s FTC v. Actavis.

The Provigil multidistrict case, which began in 2006, was gradually divided into several consolidated class actions based on plaintiff type. In addition to Cephalon, Mylan, and Sun, the drug companies named as defendants included Sun subsidiary Ranbaxy Pharmaceuticals Inc., Barr Pharmaceuticals Inc., and Teva Pharmaceutical Industries Ltd., which acquired Cephalon in 2011.

Those cases have settled incrementally over the years—including, in one instance, 16 days into a jury trial. The FTC’s suit settled for $1.2 billion in 2015.

United filed its separate suit in the U.S. District Court for the District of Minnesota after Goldberg refused to certify a class of “end payers,” such as insurance companies and self-insured pension funds, in 2015. The case was transferred back to Goldberg’s courtroom.

The insurer eventually resolved its claims against Teva and Barr for $125 million, then challenged the settlement, arguing its lawyers hadn’t gotten its approval. The drug companies sued United for breaching the agreement, and Goldberg ruled for them last year.

The judge formally let Teva, Cephalon, and Barr out of the case June 6.

United was represented by Boies Schiller & Flexner and Zelle LLP.

Mylan was represented by Gray Plant Mooty Mooty & Bennett, Cravath Swaine & Moore, Kirkland & Ellis, Pietragallo Gordon Alfano Bosick & Raspanti, and Blank Rome LLP. Sun Pharma was represented by Berens & Miller, Venable LLP, and Harkins Cunningham LLP.

The case is United Healthcare Servs. Inc. v. Cephalon Inc., E.D. Pa., No. 17-cv-555, 7/26/19.

(Corrects July 26 story to remove reference to law firm erroneously listed on the docket.)

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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