States Accuse Major Drugmaker of Manipulating Generic Medicine Prices in Nationwide Lawsuit

Novartis and Sandoz are being sued by US states for manipulating generic medicine pricing. The 43-state complaint, which officials call a significant violation of consumer-protecting antitrust laws, includes New Jersey.

The New Jersey Attorney General’s Office announced that the firms surreptitiously coordinated bids for 31 generic drugs. The lawsuit claimed that this cooperation eliminated fair competition and kept prices high, harming patients, pharmacies, and public healthcare systems.

State investigators say Novartis exploited Sandoz to hide price-fixing gains. Novartis owned Sandoz during the alleged misconduct. The two firms split in October 2023, but New Jersey authorities say the spin-off was meant to limit Novartis’s legal exposure in multistate antitrust cases.

Generic pharmaceuticals offer cheaper alternatives to brand-name drugs. State officials claim the lawsuit’s efforts had the opposite impact. The alleged action raised prices, putting unnecessary financial hardship on individuals who use these drugs daily.

The litigation investigation began in 2014 and lasted years. To find a coordinated pharmaceutical executive network, officials studied millions of phone records and consulted cooperating witnesses. The findings claimed business executives colluded to set prices, divide market share, and manipulate bidding, impeding free-market competition.

Soon after the complaint was announced, Novartis and Sandoz declined to comment. Switzerland-based Novartis has a large presence in the U.S., including East Hanover, New Jersey. Separation made Sandoz a separate corporation.

This lawsuit is part of New Jersey and other states’ generic medicine business misbehavior investigation. New Jersey has settled with other pharmaceutical corporations accused of similar activities in recent years, indicating a persistent push by state authorities to hold drug producers accountable.

Restitution, civil penalties, legal costs, and attorney fees are sought in the action. In addition to recovering damages, state officials want to improve prescription medication market openness and justice.

Due to the claims and number of states implicated, the case is expected to garner national attention. The case underlines consumer concerns about prescription pricing and the need for public health and affordability enforcement.

Sources

New Jersey Office of the Attorney General
New Jersey Division of Consumer Affairs