After settling criminal price-fixing case, Novartis' Sandoz inks $185M civil deal with feds

Novartis
Novartis' generics giant Sandoz has agreed to $380 million in two price-fixing settlements, one civil and the other criminal, with the U.S. government. (Novartis)

Nineteen months after settling the criminal portion of a federal price-fixing lawsuit, Novartis' generics unit Sandoz is paying up to resolve civil allegations.

After agreeing to pay $195 million last March to resolve criminal claims related to its part in a price-fixing scheme, the company has now inked a civil deal worth $185 million.

Specifically, the civil portion of the lawsuit relates to illegal payments the companies received for the sale of goods at rigged prices, the feds say.

“Today’s settlement contains no new factual allegations against Sandoz,” the company said in a statement. “The company fully provisioned for this settlement and disclosed the agreement in principle as part of the March 2020 resolution.”

The agreements stem from an industrywide probe into price-fixing on generic drugs. Back in 2019, 44 states took legal action against 20 generic drug makers who were engaged in what Connecticut attorney general William Tong called “the largest cartel case in the history of the United States.” Prosecutors said companies worked together to split up markets and raise prices for a host of generic drugs. 

RELATED: Novartis shells out $195M to settle criminal charges in generics price-fixing probe

The suit pointed directly at Teva, while also implicating Mylan, Pfizer, Lupin, Glenmark and other generic drugmakers. Less than three months ago, Teva settled with Mississippi for a relatively modest sum of $925,000.

Aside from the lawsuit from states, the Department of Justice has also been involved. On Friday, the agency said Apotex has also settled criminal and civil cases for a total of $49 million. The company makes pravastatin, a generic used to treat high cholesterol.

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For Sandoz, the civil deal follows some high-profile developments in the case. Aside from its earlier settlement, last February, former Sandoz senior executive Hector Armando Kellum pled guilty to federal conspiracy charges for his role in a scheme to fix prices for several generic products, including topical steroid clobetasol and antifungal nystatin triamcinolone cream.

In exchange for his plea, Kellum agreed to cooperate with the ongoing federal investigation. His sentence included 10 years in prison and a $1 million fine.