EU charges Teva over delaying cheap sleep drug

European Union sues Israeli pharmaceutical company for colluding to delay manufacture of generic sleep drug.



European Union regulators on Monday filed antitrust charges against Israeli drug-maker Teva for colluding to delay a cheaper generic version of modafinil, a blockbuster sleep drug.

The European Commission said in a statement that it had informed Teva of its "preliminary view" that an agreement concluded with rival Cephalon was in breach of EU antitrust rules.

Under the agreement, Teva committed not to market a cheaper generic version of modafinil, Cephalon's drug for sleep disorders, the EU said.

The EU, under the stewardship of Competition Commissioner Margrethe Vestager, said Teva had agreed to the delay in return for "a substantial transfer of value from Cephalon through a series of cash payments and various other agreements."

In a similar case, in 2014 the commission hit French drugs giant Servier with a huge 331-million-euro fine for colluding to delay a cheaper generic version of perindopril, a popular blood pressure treatment. Teva was also fined in that case.

Generic products are far cheaper than brand medicines and lead to huge savings to patients and health care providers while remaining just as effective.

But in so-called pay-for-delay deals, drug makers secretly compensate generic rivals to thwart the introduction of cheaper versions of blockbuster drugs for an agreed time.

Drug makers argue that the arrangement allows them sufficient time to recoup expensive research and marketing costs incurred to bring their products to the market.

This latest EU case involving modafinil was opened in 2011. Teva settled similar litigation with US anti-trust authorities in 2015.

There is no legal deadline for the Commission to complete the case.