FTC is investigating whether Cephalon's Provigil settlements with generic firms violate the Federal Trade Commission Act "by restricting the sale of modafinil products," according to Barr Pharmaceuticals.

Earlier this year, Cephalon reached agreements with four generic companies regarding the launch of generic Provigil for treatment of sleep disorders such as sleep apnea and narcolepsy. Under the deals, Barr, Teva, Ranbaxy and Mylan can come to market with modafinil in October 2011, three years prior to patent expiration (¹ Also see "Cephalon To More Than Double Provigil Sales Team Through Takeda Co-Promotion Deal" - Pink Sheet, 13 June, 2006.).

Cephalon said FTC has asked for information about the agreements on several occasions throughout the year, most recently in July, but has not characterized a specific issue of interest.

"We did a fair amount of research to lead us to a document that we believe meets both the spirit and the letter of the law and will withstand scrutiny," Cephalon told "The Pink Sheet" DAILY. "So we are confident in the legality of these agreements. We have provided the FTC with what they have asked for."

FTC's scrutiny of the Cephalon deal comes on the heels of the breakdown of another agreement that would have delayed the generic entry of Bristol-Myers Squibb/Sanofi-Aventis' anti-thrombotic Plavix.

Apotex launched the first generic version of Plavix (clopidogrel) Aug. 8, after the proposed settlement fell apart (² Also see "Apotex Launches Generic Plavix" - Pink Sheet, 8 August, 2006.). Under the arrangement, which regulators criticized and states attorneys general rejected, Apotex would have received a payment in exchange for delaying the market entry of generic Plavix. A federal court is now weighing whether to enjoin Apotex from further sales pending resolution of the patent dispute (³ Also see "Plavix Injunction Ruling Will Include Irreparable Harm Interpretation" - Pink Sheet, 22 August, 2006.).

Antitrust concerns may have helped shape the nature of another recent settlement between Barr and Shire involving the attention deficit/hyperactivity disorder medication Adderall XR (amphetamine extended-release) ("⁴ Also see "Shire Settlement With Barr Permits Generic Adderall XR Entry In 2009" - Pink Sheet, 15 August, 2006.). The deal allows Barr to launch generic Adderall XR in April 2009, nine years before the Shire patent expires, unless another generic launches first. However, Shire is not paying Barr to delay the launch of generic Adderall XR.

It remains to be seen whether FTC can be a force in disrupting generics deals, given the Supreme Court's recent decision denying FTC's request to hear a case between the agency and Schering-Plough. The case concerned Schering's settlement with Upsher-Smith involving generics of Schering's K-Dur (potassium chloride) (⁵ Also see "Supreme Court Denies Certiorari To FTC v. Schering-Plough" - Pink Sheet, 26 June, 2006.).

- Daniel Fowler (d.fowler@elsevier.com)

Cephalon Provigil Generics Settlements Under FTC Investigation

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