The agency is challenging deals worth an estimated $200 million with Barr Labs, Ranbaxy Labs, Mylan Labs and Teva to keep a generic version of the Provigil sleep-disorder pill off the market until 2012. In its suit, the FTC asks the US District Court for the District of Columbia to void the agreements, essentially giving the generic drugmakers a green light to start selling their low-priced copycats.

The FTC contends Cephalon took that step because Provigil is such an important product - the pill generated $800 million last year, or 40 percent of sales. “The prospect of generic competition was a major financial threat to the company,” according to the FTC, which called the payments “purportedly independent business transactions.” But as a result, Cephalon forced patients and other consumers to pay hundreds of millions of dollars more a year than they otherwise would have.

“Cephalon prevented competition to Provigil by agreeing to share its future monopoly profits with generic drug makers poised to enter the market, in exchange for delayed generic entry. Such conduct is at the core of what the antitrust laws proscribe,” says Jeff Schmidt, the FTC’s Bureau of Competition director, in a statement. By making the payments, “Cephalon achieved a result that assertion of its patent rights alone could not.” Here’s the lawsuit.

In a statement, Cephalon defended its action and vowed to fight the suit: “Cephalon stands by the strength and validity of our Provigil patents and the legal basis for these settlements. We are disappointed that the FTC has determined to challenge these agreements as we believe they fully comply with both the spirit and letter of the antitrust laws. As importantly, our settlements confer a meaningful benefit to US consumers by providing for the entry of generic modafinil three years early.”

This isn’t the first time Cephalon has been in the federal government’s crosshairs over Provigil. The drugmaker struck a deal with the US Attorney in Philadelphia a few months ago and signed a corporate integrity agreement after agreeing to a misdemeanor violation of the Food, Drug and Cosmetic Act. The probe focused on whether Cephalon sales reps were improperly marketing Provigil, which docs have prescribed to treat depression and ADHD.

And an FDA panel last fall recommended that Provigil, which is supposed to be prescribed only to adults who suffer from narcolepsy and sleep disorders, should carry stronger warnings to discourage docs from prescribing the med to kids, even though labeling already says the drug isn’t for pediatric use.