🔒AG Tong leads 43 states in $400M settlement with Sandoz over generic drug prices

Connecticut Attorney General William Tong on Monday announced a $400 million tentative agreement with generic drug manufacturer Sandoz Inc., resolving claims that the company took part in a long-running conspiracy to inflate prices and blunt competition across the prescription drug market. The agreement, reached on behalf of 43 states and territories, would push Sandoz’s total payments to state attorneys general to roughly $469 million once earlier settlements with individual states are counted, according to Tong’s office. It also resolves allegations that the company’s past and present international affiliates — Novartis AG, Sandoz AG and Sandoz Group AG — joined in the alleged conduct and fraudulently moved assets to avoid liability. “Sandoz Inc. rigged the generic drug market, forcing customers to pay higher prices for critical medication. The company then fraudulently shielded its assets to evade accountability,” Tong said. “This settlement in principle ensures the company takes responsibility for its brazen actions and is a major step as we head to our first trial.” Sandoz, which is based in Switzerland, described the deal in its own announcement Monday as a roughly $450 million package that its U.S. subsidiary will pay in installments over seven years beginning in 2027. The company said the agreement carries no admission of wrongdoing. Sandoz continues to reject the allegations and does not expect the settlement to change its 2026 guidance. Beyond the money, Sandoz has agreed to a set of internal reforms intended to ensure compliance with antitrust laws, Tong’s office said. The settlement still requires signatures from all necessary states and territories. The settlement does not end the litigation. Connecticut has filed four complaints since 2016, and only the Sandoz claims are resolved. Then-Attorney General George Jepsen filed the first in 2016, naming Heritage Pharmaceuticals and 17 other corporate defendants, two individuals and 15 generic drugs. A second followed in 2019 against Teva Pharmaceuticals and 20 other large manufacturers. The third complaint is the one headed for trial, anticipated in 2027. It centers on 80 topical generic drugs accounting for billions of dollars in U.S. sales and names 26 corporate defendants and 10 individuals. The states filed the fourth earlier this year, seeking to hold Novartis AG, Sandoz Group AG and Sandoz AG liable for Sandoz Inc.’s conduct and for the asset transfers. That complaint is what Monday’s agreement resolves alongside the claims against Sandoz Inc. itself. The cases rest on a document database of more than 20 million records and a phone database covering millions of call records and contact information for more than 600 sales and pricing employees in the generics industry, according to the attorney general’s office. Investigators also obtained a two-volume notebook in which one cooperating witness kept contemporaneous notes of calls with competitors and internal company meetings over several years. Prosecutors say the complaints describe a web of competing executives who met at industry dinners, lunches, cocktail parties and golf outings, and who traded frequent calls, emails and text messages. The states have secured about $96.5 million in earlier settlements in the same litigation with Glenmark, Lannett, Bausch, Apotex and Heritage.