Michigan Getting $3.4 Million In Settlement With Drug Maker

LANSING (WWJ/AP) - Michigan is expected to get nearly $3.4 million of a multi-state settlement with a pharmaceutical company.

Attorney General Bill Schuette says in a statement Friday that the money is part of a $125 million national settlement with Cephalon.

Part of the money will go to Michigan consumers who bought the drug Provigil, which is used to treat narcolepsy and sleep apnea.

The settlement ends a multi-state investigation into conduct by Cephalon that delayed generic versions of Provigil from entering the market for years, causing consumers to pay higher prices. The company denied wrongdoing.

The investigation revealed that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable, according to the Attorney General's office.

Before that court finding, Cephalon was able to delay generic competition for over a decade by filing patent infringement lawsuits against all potential generic competitors. Cephalon subsequently settled those lawsuits in 2005 and early 2006 by paying the generic competitors to delay sale of their generic versions of Provigil until at least April 2012.

Because of that delayed entry, consumers, states, and others paid hundreds of millions more for Provigil than they would have if generic versions of the drug launched by early 2006, as expected.

Details of the National Settlement with Cephalon

The settlement includes $35 million for distribution to consumers who bought Provigil. Michigan's total recovery will be about $3,382,466.72 consisting of: (1) $1,476,858.68 to compensate for Provigil purchases by certain state entities or authorized purchases off state contracts; (2) an estimated $1,266,569.47 for distribution to Michigan consumers for payments for Provigil; and (3) $639,038.57 for Michigan's share of disgorgement and costs.

The settlement is subject to court review.

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