Lansing, Michigan – The price of a common prescription can rise quietly, one refill at a time. But behind those increases, state investigators say, was a sprawling network of competitors accused of cooperating instead of competing.
Michigan Attorney General Dana Nessel is now part of a 43-state and territory coalition announcing a $400 million settlement in principle with generic drugmaker Sandoz Inc.
The agreement would resolve allegations that Sandoz participated in long-running schemes to manipulate prices, suppress competition and restrain trade involving numerous generic prescription drugs. Including amounts paid under earlier agreements with other states, the company would pay approximately $469 million to settle claims brought by state enforcement agencies.
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The proposed settlement also covers allegations involving Sandoz’s current and former international affiliates, including Novartis AG, Sandoz AG and Sandoz Group AG. State officials accused the companies of participating in the alleged anticompetitive activity and fraudulently transferring assets to avoid liability.
Sandoz has also agreed in principle to internal reforms intended to strengthen antitrust compliance and preserve fair competition. The deal remains dependent on signatures from all required states and territories. It arrives as the states prepare for an anticipated trial in 2027.
“Michigan residents deserve access to affordable, essential medication without being taken advantage of,” Nessel said.
“I am proud to have worked with a coalition that secured meaningful changes that protect consumers. My office remains committed to holding drug manufacturers that put profits ahead of public health accountable.”
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The litigation stretches back a decade. Michigan joined nearly every state and territory in filing the first antitrust complaint in 2016. Three complaints followed, targeting dozens of pharmaceutical companies, executives and generic drugs. A fourth complaint filed earlier this year focused on allegations against Novartis and several Sandoz entities.
The third case, expected to reach trial first, concerns 80 topical generic medications responsible for billions of dollars in U.S. sales. It names 26 companies and 10 individual defendants.
Investigators built the cases using testimony from cooperating witnesses, more than 20 million documents and millions of phone records connected to over 600 sales and pricing employees. The complaints describe executives meeting at dinners, lunches, cocktail parties, golf outings and social gatherings while also communicating through calls, emails and text messages.
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According to the states, phrases such as “fair share,” “playing nice in the sandbox” and “responsible competitor” were used to disguise agreements that discouraged competition and raised prices.
Separate settlements with Glenmark, Lannett, Bausch, Apotex and Heritage have already produced approximately $96.5 million. Seven pharmaceutical executives are cooperating with the states as the remaining cases move toward trial.