The world's second-largest drugmaker says Teva Pharmaceutical Industries will pay $1.6 billion to Pfizer and Japanese drugmaker Takeda Pharmaceutical.
Another generic drugmaker, Sun Pharmaceutical Industries, will pay $550 million.
Teva is one of the world's largest generic drugmakers. It started selling its generic version of Protonix in December 2007. Sun launched its own version in early 2008. The drug's U.S. patent expired in 2011.
Drugmaker Nycomed developed Protonix before the company was purchased by Takeda. Nycomed licensed Protonix to Wyeth, which Pfizer has since purchased.
Pfizer says it will receive 64 percent of the settlement proceeds.