Drug firms to pay state $70 million over ‘illegal’ pacts

California Attorney General Xavier Becerra on Monday announced four settlement agreements with three major drug companies. The firms will pay $70 million to the state to resolve claims that they illegally engaged in socalled “pay for delay” practices — when pharmaceutical companies pay generic drugmakers to delay entering the market with cheaper versions of branded drugs in order to maintain a monopoly.

The settlements with Teva Pharmaceutical, Endo Pharmaceutical and Teikoku Pharma are the largest payfordelay settlements received by any state and the only ones to secure injunctive relief for a state against future payfordelay agreements, Becerra’s office said.

The companies’ actions delayed generic versions of Provigil, a branded narcolepsy drug, from entering the market for nearly six years, and prevented a generic version of the shingles medication, Lidoderm, from entering the market for almost two years, according to the announcement.

The primary settlement was with Teva, one of the world’s largest drug manufacturers, over the company’s actions that allowed it to maintain a monopoly over Provigil sales between 2006 and 2012, according to the statement. It will result in a 10year injunction prohibiting Teva from payfordelay agreements and a $69 million payment to the state that will include a $25.3 million consumer fund for California residents who bought Provigil and two similar narcolepsy drugs Nuvigil and Modafinil. The settlement is not an admission of wrongdoing, according to the agreement.

The other settlements are with Teva, Endo and Teikoku, which allegedly entered into payfordelay agreements to delay Lidoderm, a patch to relieve shingles pain. Endo will pay $760,000 and will be subject to an eightyear injunction; Teikoku, a partner in the production of Lidoderm with Endo, will be subject to a 20year injunction.

Teva and Teikoku did not immediately return requests for comment Monday. A spokeswoman for Endo said the injunctive terms are “consistent with” those reached in 2017 with the Federal Trade Commission.

“These dark, illegal, collusive agreements that drug companies devise not only choke off price competition but burden our families and patients,” Becerra said in a statement. “They force every Californian to shoulder higher prices for lifesaving medication. It’s nothing less than playing with people’s lives.”

Becerra and Assemblyman Jim Wood, DHealdsburg, are cosponsoring a bill, AB824, that would crack down on drug companies engaging in similar behavior. Catherine Ho is a San Francisco Chronicle staff writer. Email: cho@ sfchronicle.com Twitter: @Cat_Ho