The Federal Trade Commission (FTC) said that United States antitrust regulators have settled a long-pending fight with Cephalon over how it has resolved a patent infringement lawsuit associated with wakefulness drug Provigil.

As a part of the settlement, Teva Pharmaceuticals which owns Cephalon has agreed to pay $1.2 billion to refund buyers who paid too much for Provigil and to abstain from similar deals in the future, the FTC said.

It has been said that some buyers, including wholesalers and insurance companies, have reached court settlements for this dispute.

As per sources familiar with the agreement who asked not to be named, the FTC will be receiving some additional money during the agreement.

Cephalon had been accused by the FTC for illegally protecting its monopoly on Provigil by paying generic drug makers to drop their challenges to Cephalon’s patent.

This is called ‘pay-for-delay’ agreement under which the brand name drug maker pays a generic maker to delay in entering the market.

FTC Chairwoman Edith Ramirez said, “Today’s landmark settlement is an important step in the FTC’s ongoing effort to protect consumers from anti-competitive pay for delay settlements, which burden patients, American businesses, and taxpayers with billions of dollars in higher prescription drug costs”.

Teva said in a statement that the delay agreements that prompted the FTC probe occurred in 2005 and 2006, before it purchased Cephalon.

It further said they are pleased to have reached an agreement with the government. The company believes that it is the right path for their company, for the industry and for the patients they serve.

The FTC has fought pay for delay deals for more than 10 years. The agency has pressurized legislation to put a ban on the patent agreements or make it easier for the FTC to challenge them.