Sandoz will pay $265m to settle price fixing case in US

topical medicines in dermatology
Nataliya Melnychuk

Generic and biosimilar drug producer Sandoz has agreed a $265 million settlement that aims to put allegations of price-fixing brought in a Pennsylvania lawsuit behind it.

The agreement – which still needs court approval before it can be finalised – has been made in response to a class action brought by direct purchaser plaintiffs against the company’s US subsidiaries Sandoz Inc and Fougera Pharma.

The wide-ranging multidistrict litigation (MDL) marks the culmination of an investigation started in 2017 and led by the Connecticut Attorney General into conspiracies by a long list of drugmakers to fix prices and allocate markets, which led to around 90 lawsuits that were consolidated into the Pennsylvania action.

Sandoz – formerly part of Novartis before spinning out as an independent company last October – said the settlement would resolve all federal antitrust damages for direct purchaser class plaintiffs’ claims in the MDL and “contains no admission of wrongdoing.”

The suit alleges a “widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for generic drugs sold across the US,” zeroing in on topical medicines used in dermatology.

At the time, Connecticut AG William Tong claimed that the companies cited in the complaint used “phone calls, text messages, emails, corporate conventions, and cosy dinner parties” to fix prices and restrain competition.

“They knew what they were doing was wrong, and they took steps to evade accountability, using code words and warning each other to avoid email and detection,” he added.

Sandoz is still facing two other cases involving “indirect and downstream purchases and damages claims under state law.” The company said it would “defend itself vigorously” in those cases and has questioned whether downstream purchasers were actually damaged due to the alleged conduct.

Novartis previously settled two other antitrust lawsuits alleging price fixing by Sandoz. It paid out $195 million in 2020 to settle a criminal claim brought by the federal government – at the time, the largest ever in a US antitrust case – and in 2021 paid $185 million to resolve the civil portion of that complaint.

In a statement, Sandoz said the latest settlement would release the company from claims of misconduct between 2009 and 2019. Class members have the right to opt out of it, which could result in the amount being reduced by up to 12% or around $32 million, it added, noting it can also terminate the settlement if opt-outs reach a certain pre-determined threshold.

Photo by Nataliya Melnychuk on Unsplash