Teva Pharmaceuticals (TEVA) shares were indicated lower in pre-market trading Wednesday after the drugmaker reached a settlement with the Federal Trade Commission over allegations it delayed the release of generic medicines through agreements with pharmaceutical rivals.
The FTC settlement, made public last night in Washington, will essentially prevent Teva from cutting so-called "pay for delay" deals in the future, with the Commission sees as costing U.S. consumers billions in higher drug prices. The European Commission has also targeted similar deals in the past, including a pact between Teva and rival Cephalon over a sleep disorder drug Provigil before the two groups combined in 2012.
If approved by various courts, the deal will prohibit Teva from engaging in reverse-payment patent settlement agreements that "impede consumer access to lower-priced generic drugs", the FTC said.
"This settlement represents another milestone in the Commission's unwavering commitment to put an end to harmful reverse-payment agreements," said FTC Chairman Joe Simons. "This broad settlement prevents the world's largest manufacturer of generic drugs from entering into collusive agreements that prevent price competition by keeping generic drugs off the market."
Teva shares were marked 1.3% lower in pre-market trading Wednesday, indicating an opening bell price of $17.79 each.
Earlier this month, Teva posted weaker-than-expected fourth quarter adjusted earnings of 53 cents a share, as revenues fell 15.5% to $4.56 billion.
The company said it is now expecting full-year adjusted per-share earnings of $2.20-$2.50 on revenue of $17 billion to $17.4 billion, below current FactSet consensus estimates of $2.84 per-share earnings and $18.06 billion in revenue.