Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupport
Contact Us
Search
Close

Federal Judge Puts Narcolepsy Drug Horizontal Conspiracy Claims to Bed

By Lisa A. Peterson on June 27, 2014
Email this postTweet this postLike this postShare this post on LinkedIn

On Monday, June 23, 2014, a Federal Judge in the Eastern District of Pennsylvania granted summary judgment for five pharmaceutical companies on horizontal conspiracy claims brought by Apotex Inc. and direct purchaser and end payor plaintiffs regarding the popular narcolepsy drug Provigil.  Provigil’s key ingredient is modafinil, “a wakefulness-promoting agent” used to treat sleep disorders like narcolepsy.  Apotex and the Provigil buyers claimed that Cephalon, Inc. unlawfully restrained trade and maintained a monopoly on modafinil sales by facilitating a horizontal conspiracy through reverse payment settlements with generic-drug manufacturers.

Cephalon, which manufacturers Provigil, entered into reverse payment settlements (also known as “pay-for-delay”) between 2005-2008 to settle patent infringement litigation with Teva Pharmaceutical Industries Ltd., Ranbaxy Laboratories Ltd, Mylan Inc., and Barr Laboratories, Inc.  Although Judge Mitchell Goldberg previously held the plaintiffs’ claims were sufficient to withstand a motion to dismiss, on summary he judgment he found insufficient evidence of a conspiracy.

Judge Goldberg held that the plaintiffs lacked sufficient evidence to demonstrate the existence of the alleged hub-and-spoke conspiracy.  He reasoned that evidence of “conscious parallelism” among the defendants’ behavior was not enough to levy an antitrust claim when equally plausible independent explanations for their behavior exist.  For example, the generic-drug manufacturers were separately compensated and some would receive favored treatment regarding royalty rates.  The “pay-for-delay” settlement agreements also created contingent launch provisions, reassuring generic companies that they would not lose the opportunity to launch if another generic-drug manufacturer obtained an earlier date.  Had the agreements been contrary to the generic-drug manufacturers’ self-interest, the claims would have more closely resembled noteworthy hub-and-spoke conspiracy cases.

Judge Goldberg cautioned, however, that the court’s opinion does not address the legality of each individual “pay-for-delay” settlement agreements between Cephalon and the generic-drug manufacturers.  The Federal Trade Commission is separately challenging the settlements under antitrust law.

Photo of Lisa A. Peterson Lisa A. Peterson

Lisa A. Peterson focuses her practice on antitrust, regulatory and litigation matters. She assists clients across a variety of industries and has represented numerous clients in the health care, pharmaceutical, and biotechnology industries. Lisa advises clients on mergers and acquisitions, including obtaining clearance…

Lisa A. Peterson focuses her practice on antitrust, regulatory and litigation matters. She assists clients across a variety of industries and has represented numerous clients in the health care, pharmaceutical, and biotechnology industries. Lisa advises clients on mergers and acquisitions, including obtaining clearance from the Federal Trade Commission (FTC) and Department of Justice (DOJ), as well as counsels clients on issues regarding antitrust compliance, pricing, and distribution. She also counsels clients on cartel prosecutions and defenses, including government investigations and the initiation and defense of civil class action litigation. Read Lisa Peterson’s full bio.

Read more about Lisa A. PetersonEmail
Show more Show less
  • Posted in:
    Antitrust, Competition and Trade
  • Blog:
    Antitrust Alert
  • Organization:
    McDermott Will & Emery
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
  • About LexBlog
  • The Field We Built
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo