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Teva Pharmaceutical reached a settlement agreement with the California Attorney General’s office to resolve a lawsuit alleging that it engaged in anti-competitive “pay-for delay” agreements with generic drug manufacturers.

Pay-for-delay agreements allow pharmaceutical companies like Teva to continue its monopoly of a branded drug after the expiration of its patent. Generic drug manufacturers agree to postpone the entry of their more affordable medicine than the branded drug to the market. Therefore, consumers continue to pay higher prices for their prescription drug.

California AG secured nearly $70 million monetary settlement

On Monday, Attorney General Becerra announced that Teva agreed to pay $69 million to settle the anticompetitive complaint related to its Provigil, a prescription medication used to treat excessive sleepiness caused by narcolepsy, sleep apnea and shift work.

AG Becerra alleged that Teva entered into pay-for-delay agreement to postpone the entry of generic competition to maintain its monopoly of Provigil from 2006 to 2012.

The Attorney General’s office also secured a $760,000 settlement from Teva, Endo Pharmaceuticals and Teikoku in connection with the product Lidoderm, a medical patch to relieve pain caused by shingles.  The settlement includes injunctions against pay-for-delay agreements between the pharmaceutical companies.

In a statement, AG Becerra said, “These dark, illegal, collusive agreements that drug companies devise not only choke off price competition but burden our families and patients—they force every Californian to shoulder higher prices for life-saving medication. It’s nothing less than playing with people’s lives. Californians shouldn’t have to pay an arm and leg to afford their prescriptions.”

In February, AG Becerra and Assembly member Jim Wood proposed AB 824 to prohibit pay-for-delay agreements between pharmaceutical companies. Their proposal also prevents the parties from using attorney-client and common-interest privileges to keep relevant information about their contracts.