Lawsuit Says Bausch and Teva Struck Deal to Keep Xifaxan Prices Sky-High

Case Overview: A class action lawsuit claims Bausch and Teva conspired to delay a cheaper generic of Xifaxan, keeping prices inflated.

Consumers Affected: U.S. end payors and patients who purchased or reimbursed Xifaxan since 2021.

Court: U.S. District Court District of Rhode Island

Pharmaceutical giants Bausch Health and Teva Pharmaceuticals struck an illegal deal to delay a cheaper generic version of Bausch’s top-selling drug, Xifaxan: a medication used to treat irritable bowel syndrome and liver-related brain disorders, a new lawsuit claims. 

The complaint, filed by the Rhode Island Laborers Health & Welfare Fund, accuses the companies of violating antitrust laws by conspiring to preserve Bausch’s monopoly and keep prices inflated. 

The lawsuit alleges that Canada-based Bausch paid Teva in 2018 to postpone launching its competing generic for up to nine years. Xifaxan, which generated nearly $2 billion in U.S. sales last year, sells for about $2,000 for a 14-day supply,a price the plaintiffs say would be closer to $200 in a competitive market.

Health Fund Says “Pay-for-Delay” Deal Kept Drug Prices Artificially High

The Rhode Island Laborers Health & Welfare Fund, which reimburses prescription costs for its members, says it’s been overpaying for Xifaxan for years due to the companies’ “pay-for-delay” agreement. 

The fund expects to continue facing inflated costs until at least 2028, when Teva is finally permitted to sell its generic version under the companies’ settlement. The lawsuit argues that Bausch’s and Teva’s actions have directly hurt insurers, benefit funds, and patients who rely on the medication.

Lawsuit Alleges Bausch Paid Teva to Stall Generic Competition Until 2028

The FDA-approved Xifaxan treats several gastrointestinal conditions, including irritable bowel syndrome with diarrhea and hepatic encephalopathy, a brain disorder linked to liver failure. Bausch acquired the drug in 2015 when it bought Salix Pharmaceuticals and has fought aggressively to protect its patents since.

According to the complaint, Bausch feared losing its multi-billion-dollar Xifaxan franchise once generic competition began. To avoid that, it allegedly paid Teva to drop its legal challenge and stay out of the market until January 2028. In return, Bausch agreed not to release its own “authorized generic” version, a move that would have created price competition.

The deal, the lawsuit claims, effectively froze out other drugmakers like Sun Pharmaceuticals and Sandoz, which later abandoned their plans to produce generics. Even after a court invalidated key Bausch patents, no generics have been able to launch due to the companies’ arrangement. The result, according to the complaint, is years of inflated prices for patients and healthcare payors.

Case Adds to a Growing Wave of Antitrust Claims in the Pharma Industry

The case joins a growing list of antitrust battles targeting major pharmaceutical players. Other recent lawsuits have accused companies like Pfizer, GoodRx, and CVS Caremark of similar tactics, from delaying generics to manipulating reimbursement rates for independent pharmacies. 

In one case, Pfizer paid millions to settle claims that it conspired to block cheaper versions of drugs like Lipitor and Effexor XR.

In this lawsuit, the Rhode Island fund seeks to represent all U.S. end payors who bought or reimbursed Xifaxan prescriptions since 2021. It is asking for damages, legal fees, and an injunction barring Bausch and Teva from continuing their alleged anticompetitive practices.

Case Details

• Lawsuit: Rhode Island Laborers Health & Welfare Fund v. Bausch Health Companies Inc
• Case Number: 1:25-cv-00479
• Court: U.S. District Court for the District of Rhode Island

Plaintiffs' Attorney:

• Joseph Meltzer (Kessler Topaz Meltzer & Check)
• Thomas Sobol (Hagens Berman Sobol Shapiro)
• John Radice (Radice Law Firm) 
• Patrick Lynch (Lynch & Pine Attorneys at Law)

Have you or someone you know taken Xifaxan? How has the price affected your access to the medication? Share your experience in the comments.