Hailey Konnath
December 26, 2025
Bausch And Teva Blocked Cheaper IBS Drug, Retailers Say
3 min
AI-made summary
- Several major retailers, including Walgreen Co
- and Kroger Co., have filed a lawsuit in Rhode Island federal court against Bausch Health Cos
- Inc
- and Teva Pharmaceuticals, alleging the companies conspired to delay the entry of a generic version of the irritable bowel syndrome drug Xifaxan until 2028
- The complaint claims this 'pay-for-delay' agreement forced purchasers to pay monopoly prices, despite the invalidation of Bausch’s patents
- The retailers seek damages, attorney fees, and an injunction against the alleged conduct.
A slew of retailers on Tuesday accused Bausch Health Cos. Inc. and Teva Pharmaceuticals of working together to keep the generic version of an irritable bowel syndrome drug off the market until 2028, forcing the retailers and other purchasers of the drug to pay monopoly prices.
Walgreen Co., The Kroger Co., Albertsons Companies Inc., H-E-B LP and SuperValu Inc. filed suit in Rhode Island federal court, claiming that a 14-day supply of Xifaxan 550 milligrams should cost less than $200. However, Bausch is charging more than $2,000 for that supply, raking in nearly $2 billion in sales of the drug, the retailers said.
Bausch is able to do so because of a pay-for-delay deal it reached with Teva in 2018, the retailers said.
"Defendants' violation of federal antitrust law allowed Bausch to charge more than ten times the competitive price for Xifaxan 550 mg, extracting billions of dollars from Xifaxan purchasers marketwide," they said in the complaint.
According to the retailers, Xifaxan contains the active pharmaceutical ingredient rifaximin, and it's the only rifaximin product available on the market to treat irritable bowel syndrome with diarrhea, or IBS-D. Millions of Americans rely on rifaximin, with some taking it for the rest of their lives, the retailers said.
Bausch obtained a series of secondary patents on the use of rifaximin to treat IBS-D, but those patents were weak and couldn't prevent competition from generic versions, the retailers said. The patents were eventually invalidated, they noted.
However, when Teva's predecessor developed a generic, Bausch sued for patent infringement, according to the suit. The companies reached a settlement before the court ruled on the merits of the litigation, the retailers said. Under that deal, Bausch paid Teva to stay out of the market for nine years — until January 2028, they said.
"One of the payments from Bausch to Teva took the form of an agreement that, if Teva agreed not to compete with Bausch until January 2028, Bausch would not compete with Teva when Teva finally did enter the market by marketing Bausch's own generic version of Xifaxan — a so-called authorized generic," the retailers said. "Teva's agreement to delay its entry was extremely valuable to Bausch, and Bausch's agreement not to compete with Teva by launching an AG was extremely valuable to Teva."
In fact, the retailers said, Bausch's payment was likely worth more than $300 million to Teva, "far more than Teva could have made by winning the patent case and competing fairly, and lawfully, against Bausch."
On top of that, Bausch and Teva included provisions in their agreement that aimed to deter other generic competitors, the retailers said. Specifically, the two pharmaceutical companies agreed that "if another generic manufacturer enters the market before January 2028 — by prevailing against Bausch in patent litigation, getting a license from Bausch, or using a special statutory provision that Congress created — then Teva can also enter on that earlier date," the retailers said.
That eliminated the possibility that a subsequent filer could enter the market before Teva and reduced the incentive for other generics makers to challenge the patents, according to the complaint.
Bausch has also received additional patents and unlawfully listed those in the U.S. Food and Drug Administration's Orange Book, giving it 30-month stays of competition, the retailers alleged.
The retailers are alleging monopolization and an unlawful reverse-payment agreement. They're seeking unspecified overcharge damages, attorney fees and an injunction blocking the pharmaceutical companies from continuing their allegedly illegal conduct.
"As a result of Bausch's and Teva's unlawful conduct, generic Xifaxan 550 mg still has not entered the market seven years after the unlawful agreement with Teva and three years after a federal court declared Bausch's IBS-D patents invalid," the retailers said. "Plaintiffs and other purchasers of the drug continue to pay monopoly prices rather than competitive prices for rifamaxin and are likely to do so until some time significantly after January 2028."
Bausch, Teva and counsel for the retailers didn't immediately respond to requests for comment late Tuesday.
The retailers are represented by Matthew T. Oliverio of Oliverio & Marcaccio LLP, Scott E. Perwin, Lauren C. Ravkind, Anna T. Neill, Joseph M. Vanek, David P. Germaine, John P. Bjork and Phillip F. Cramer of Sperling Kenny Nachwalter LLC.
Supervalu is also represented by Steve D. Shadowen, Matthew C. Weiner and Melissa Mather of Hilliard Shadowen LLP.
Counsel information for the pharmaceutical companies was not available Tuesday.
The case is Walgreen Co. et al. v. Bausch Health Companies Inc. et al., case number 1:25-cv-00515, in the U.S. District Court for the District of Rhode Island.
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Hailey Konnath
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