Just before trial proceedings were to begin in a long-running dispute between the US Federal Trade Commission (FTC) and drugmaker Cephalon - now a subsidiary of Teva - the Israeli generics giant has agreed to pay $1.2 billion to settle the case dating back to 2008.

The US antitrust regulator, which has been campaigning to stop so-called pay-for-delay cases, contends that Cephalon paid $300 million to generic drugmakers (including its current parent company) to delay selling competing versions of its sleep disorder drug Provigil until 2012 and to refrain from challenging the drug's patent.

Reports said this was the first time in its campaign that the FTC has won the right to have a manufacturer reimburse drug buyers.

Against the $1.2 billion sum, Teva, which bought Cephalon in 2012, will receive credit from private settlements it has already agreed in other related cases, including a $512 million settlement made in April of this year.

In exchange for settling out of court, the Israeli drugmaker has agreed not to enter any pay-for-delay agreements.

The FTC said the pay-for-delay agreements caused consumers, wholesalers, pharmacists and insurers to pay hundreds of millions of dollars more for the drug than they would have if less expensive generics had been available.

"I believe this settlement brings us another step closer to stopping these illegal arrangements," FTC chairwoman Edith Ramirez said in announcing the agreement with Teva.