48 States Recover $67 Million in Generic Drug Price-Fixing, File New Suit Against Novartis

A coalition of 48 states and territories announced $17.85 million in new settlements with Lannett Company and Bausch Health over alleged conspiracies to inflate generic drug prices, bringing total recoveries in the multistate investigation to approximately $67 million. On the same day, 42 states filed a 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 a coordinated state-level pharmaceutical antitrust proceeding. Generic drugs account for approximately 90% of all U.S. prescriptions, making price manipulation a matter of broad consumer impact. The first civil trial against remaining defendants is scheduled for late 2026 in Hartford, Connecticut.

Settlements with 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 agreed to cooperate with the states' ongoing investigation and litigation against remaining defendants by producing documents and witness testimony.

These agreements follow earlier settlements with Heritage Pharmaceuticals ($13.1 million) and Apotex ($36 million), bringing cumulative recoveries to approximately $67 million across four manufacturers. The alleged conduct occurred between May 2009 and December 2019, involving coordinated price increases on commonly prescribed generic products.

Alleged Anticompetitive Conduct

According to the New York AG's office, the companies participated in agreements to allocate markets and fix prices for generic medications. The complaints allege competitors agreed not to undercut each other's pricing, eliminating price competition and resulting in significant price increases for essential medications.

Novartis Lawsuit: 31 Medications, 42 States

The complaint against Novartis, Sandoz Group AG, and Sandoz AG alleges that the companies coordinated with competitors to fix prices, rig bids, and allocate market share for 31 generic drugs between 2009 and 2019. Sandoz was a major global generic manufacturer before Novartis completed its corporate spinoff in October 2023.

The 42-state complaint alleges corporate executives communicated directly through telephone calls, industry conferences, and trade association meetings to coordinate the timing and magnitude of price adjustments.

Scope of the Multistate Investigation

The investigation involves 30 corporate defendants and 25 individual executives. Connecticut has served as lead investigating state since the probe was initiated.

Parallel Criminal Enforcement

State civil litigation proceeds alongside federal criminal enforcement. The DOJ Antitrust Division secured guilty pleas from corporate executives and manufacturers. In 2020, Teva Pharmaceuticals agreed to pay $450 million to resolve criminal and civil claims regarding generic drug pricing.

Trial Schedule

The first civil trial against remaining non-settling defendants is scheduled for late 2026 in federal court in Hartford. The trial will introduce corporate records and witness testimony obtained through prior settlement cooperation agreements.

Implications for Legal Practitioners

The generic drug price-fixing litigation affects several areas of practice:

Consumer damages claims: Patients and health plans that purchased affected generic drugs at inflated prices may hold private antitrust claims. Documented pharmacy purchase records from 2009 through 2019 establish baseline exposure.

Institutional payer recovery: Self-funded employer plans, union health funds, and public healthcare programs that reimbursed inflated generic prescriptions require historical claims data to quantify damages.

Antitrust discovery records: Materials produced under state settlement cooperation terms will provide evidence for parallel private antitrust actions brought by direct and indirect purchasers.

Next Steps

Summary

The generic drug price-fixing investigation has secured $67 million in recoveries and expanded to include Novartis. With 30 corporate defendants and a late-2026 trial date in Hartford, the litigation will determine financial exposure for remaining manufacturers.

Documenting claimant prescriptions during the 2009-2019 period requires comprehensive record retrieval across pharmacy chains and healthcare networks.

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