On 17 December, Sandoz, a leading global provider of generic and biosimilar medications, revealed several measures to resolve the US Generic Drug Antitrust Class Action Litigation. This announcement follows earlier settlements with the US Department of Justice in 2020 and 2021 and an agreement with the direct purchaser plaintiffs’ class in February 2024.

The antitrust case concerning generic pharmaceutical drugs claims that the defendants were involved in an unlawful price-fixing cartel affecting over 200 generic medications. In particular, the defendants are accused of breaching antitrust regulations by colluding to fix, increase, and stabilize drug prices and manipulating bids to reduce competition.

In August 2023, two defendants, Teva Pharmaceuticals and Glenmark Pharmaceuticals, agreed to pay 255 million dollars to settle criminal antitrust allegations related to these actions. Teva paid a 225 million criminal penalty — the largest to date for a domestic antitrust cartel — and Glenmark paid a 30 million criminal penalty. Both companies will be subject to prosecution should they breach the terms of their agreements, and a conviction could result in mandatory exclusion from federal health care programs.

Sandoz has now reached a settlement with the end payer plaintiffs’ class amounting to 275 million dollars, which is anticipated to be disbursed by 31 December 2024. Additionally, the company has set aside 265 million dollars to cover pending claims from opt-out plaintiffs and State Attorneys General.

This agreement, which does not imply any admission of fault by Sandoz US, addresses all damage claims from the end payer class. This class generally includes specific consumers, insurers, health and welfare funds, employee benefit plans, and other organizations that have paid for or reimbursed drug sales. According to the terms of the agreement, Sandoz US will disburse 275 million dollars in return for a complete release from all claims made against it in the end payer class action by the members of the settlement class.

The remaining claims are brought by various US States and Territories, the indirect reseller plaintiff class and individual plaintiffs involved in the multidistrict litigation. Sandoz US is actively defending itself in these matters and has introduced several defenses, including questioning whether downstream purchasers suffered actual damages due to the alleged actions.

In light of its current evaluation of these outstanding claims, Sandoz has established a provision amounting to 265 million dollars. As the litigation advances, Sandoz will continue to evaluate the overall circumstances and may adjust the provision accordingly, increasing or decreasing it as deemed necessary.

In addition to the US generic antitrust litigation, Sandoz Canada and Fougera Pharmaceuticals, a Sandoz subsidiary, have been named in a class action in Ontario, Canada, alleging price fixing in the Canadian generic pharmaceutical market. These claims are being vigorously contested.