Bausch, Teva accused of delaying generic version of diarrhea drug Xifaxan

By Mike Scarcella

Bausch Health BHC and Teva Pharmaceuticals TEVA were sued on Monday for allegedly conspiring to delay sales of a generic version of Bausch’s blockbuster diarrhea drug Xifaxan, causing buyers to pay inflated prices.

The proposed class action filed in Rhode Island federal court by the Rhode Island Laborers Health & Welfare Fund said Canada-based Bausch allegedly paid Teva in 2018 to delay launching a generic version of Xifaxan 550 mg, violating antitrust laws.

Xifaxan generated nearly $2 billion in U.S. sales last year, the lawsuit said.

Bausch, Teva and lawyers for the Rhode Island fund did not immediately respond to requests for comment.

The fund pays for or reimburses the cost of prescription drugs and other health benefits for its members. Its lawsuit said it expects to pay higher prices for Xifaxan until after January 2028, when Teva is allowed to market its generic version.

A 14-day supply of the drug costs more than $2,000, compared to less than $200 in a competitive market, according to the lawsuit.

The U.S. Food and Drug Administration has approved Xifaxan to treat irritable bowel syndrome and travelers' diarrhea in children, and to reduce the risk of recurring overt hepatic encephalopathy, a brain disorder caused by liver failure.

Bausch acquired the rights to Xifaxan in 2015 with its purchase of drugmaker Salix, now a subsidiary of the company.

The lawsuit said “Xifaxan revenue was so critical that any expiration of its patent protection sooner than anticipated would adversely impact Bausch’s future cash flows.”

Bausch has agreed to allow Xifaxan generics from Teva, Sun Pharmaceuticals (SUN.NS) and Sandoz (SDZ.S) starting in 2028 after settling related patent disputes.

The lawsuit seeks unspecified monetary damages and a court order barring the defendants' alleged anticompetitive conduct.

The case is Rhode Island Laborers Health & Welfare Fund v. Bausch Health Companies Inc, U.S. District Court, District of Rhode Island, No.1:25-cv-00479.

For plaintiff: Joseph Meltzer of Kessler Topaz Meltzer & Check; Thomas Sobol of Hagens Berman Sobol Shapiro; John Radice of Radice Law Firm; and Patrick Lynch of Lynch & Pine Attorneys at Law

For defendants: No appearances yet

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