48 States Recover $67 Million in Generic Drug Price-Fixing — Then Sue Novartis

A coalition of 48 states and territories announced $17.85 million in new settlements with Lannett Company and Bausch Health over conspiracies to artificially inflate generic drug prices — bringing total recoveries in the multistate investigation to approximately $67 million. On the same day, 42 states filed a new lawsuit against Novartis and its former subsidiary Sandoz for allegedly fixing prices on 31 generic medications.

The enforcement action, led by Connecticut Attorney General William Tong, represents the largest coordinated state-level pharmaceutical antitrust effort in years. Generic drugs account for approximately 90% of all U.S. prescriptions, making the price manipulation alleged in this case a matter of direct consumer harm on a massive scale. The first trial against remaining defendants is expected in late 2026 in Hartford, Connecticut.

The Settlements: Lannett and Bausch Health

Lannett Company agreed to pay $13.77 million and implement a 10-year antitrust compliance program. Bausch Health (formerly Valeant Pharmaceuticals) agreed to pay $4.08 million. Both companies must cooperate with the states' ongoing investigation and litigation against remaining defendants — a requirement that could generate significant new evidence.

These settlements follow earlier recoveries from Heritage Pharmaceuticals ($13.1 million) and Apotex ($36 million), bringing the cumulative total to approximately $67 million across four companies. The alleged conduct spanned from May 2009 through December 2019 and involved coordinated price increases on commonly prescribed generic medications.

What the Companies Did

According to the New York AG's office, the companies participated in conspiracies to allocate markets and fix prices for generic drugs. The schemes typically involved competitors agreeing not to undercut each other's pricing — eliminating the competition that is supposed to make generic drugs affordable. In some cases, prices for individual drugs increased by several hundred percent over short periods.

The Novartis Lawsuit: 31 Drugs, 42 States

The new complaint against Novartis, Sandoz Group AG, and Sandoz AG alleges that the companies conspired with competitors to fix prices, rig bids, and allocate markets for 31 generic drugs between 2009 and 2019. Sandoz was one of the world's largest generic drug manufacturers before Novartis spun it off as an independent company in October 2023.

The 42-state coalition alleges that Novartis and Sandoz executives coordinated pricing with competitors through direct communications, industry conferences, and trade association events. The complaint describes a pattern where companies would agree on price increases and then implement them in sequence to avoid detection.

The Broader Investigation

The multistate investigation involves 30 corporate defendants and 25 individual executives, making it one of the most complex antitrust enforcement actions in state AG history. Connecticut has served as the lead investigating state since the probe began, with AG Tong's office coordinating evidence gathering and litigation strategy across the coalition.

The Criminal Side

The state civil enforcement runs parallel to federal criminal prosecution. The DOJ's Antitrust Division has secured multiple guilty pleas from individual executives and companies. Heritage Pharmaceuticals and its former CEO were among the first to face criminal charges. In 2020, Teva Pharmaceuticals — the world's largest generic drug maker — agreed to pay $450 million to resolve criminal and civil charges related to the same price-fixing conspiracy.

What Comes Next

The first civil trial against remaining defendants is anticipated in late 2026 in Hartford. The outcome will be pivotal — a strong plaintiff verdict would increase settlement pressure on the remaining 26+ companies, while a defense verdict could slow momentum. The cooperation requirements in the Lannett and Bausch settlements mean the states will have insider evidence and testimony to deploy at trial.

Why This Matters for Law Firms

The generic drug price-fixing case has direct implications for firms handling pharmaceutical litigation:

Consumer harm claims. Patients and insurers who paid inflated prices for affected generic drugs may have individual or class claims for damages. Prescription records documenting use of price-fixed medications during the 2009-2019 period are the foundational evidence for these claims.

Downstream healthcare costs. Inflated generic drug prices ripple through the healthcare system — affecting insurance premiums, out-of-pocket costs, and Medicaid/Medicare spending. Firms representing healthcare systems or government payers should monitor the Hartford trial closely.

Evidence generation. The cooperation requirements imposed on Lannett and Bausch will produce new documents and testimony that could support related litigation — including private antitrust actions filed by pharmacy chains, insurers, and direct purchasers.

Looking Ahead

The Bottom Line

The generic drug price-fixing investigation has now recovered $67 million and opened a major new front against Novartis — one of the world's largest pharmaceutical companies. With 30 corporate defendants, 25 individual executives, and a trial date approaching, this litigation is entering its most consequential phase. For firms handling pharmaceutical cases, the Hartford trial will set the precedent for how aggressively states can pursue coordinated price manipulation — and how much defendants will ultimately pay.

Prescription records are the backbone of consumer harm claims in this litigation. Documenting which patients took which generic drugs during the 2009-2019 manipulation period requires comprehensive medical record retrieval across pharmacies, primary care providers, and specialists.

Sources: Connecticut AG, New Jersey AG, New York AG, Delaware AG, DOJ, FDA Generic Drug Facts.