Novartis’ subsidiary Sandoz agrees to pay $195 million to settle antitrust case
Novartis’ Sandoz will pay a $195 million criminal penalty to resolve charges that it conspired to price-fix, rig bids and allocate customers for generic drugs. It also admitted that the sales it affected exceeded $500 million.
The company is also in also in discussion with the Department of Justice to resolve related claims that may cost another $185 million.
The charges were filed by the US District Court for the Eastern District of Pennsylvania and accused Sandoz of participating in criminal conspiracies with other competing manufacturer of generic drugs and executives between 2013 and 2015.
One of the cases saw Sandoz conspiring with Kavod Pharmaceuticals to allocate customers and fix prices of benazepril. Sandoz also conspired with companies in Michigan, Pennsylvania and New York in scheme involving clobetasol, desonide, nystatin triamcinolone and tobramycin.
The President of Sandoz, Carol Lynch, said on the agreement: “we take seriously our compliance with antitrust laws, and in reaching today’s resolution, we are not only resolving historical issues, but also underscoring our commitment to continually improving our compliance and training programmes and evolving our controls.”
This case is part of a large-scale ongoing investigation into generics price-fixing schemes. Beginning in 2014, the probe has investigated 300 drugs and 16 companies. They are facing litigation from 47 states. Executives have been accused of using coded language to work construct a price-fixing scheme where companies would have colluded to create a market landscape where they all made profit by collectively agreeing on drug prices.
Multiple companies have reached settlements or paid criminal penalties while four individuals have been charged, with three pleading guilty, including former Sandoz executive Hector Armando Kellum.
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