Sandoz Agrees to Pay $195M Criminal Fine, Largest For A US Domestic Antitrust Case

Sandoz a generic pharmaceutical company headquartered in New Jersey, was charged for conspiring to allocate customers, rig bids, and fix prices for generic drugs, the Department of Justice announced. 

A four-count felony charge was filed today in the United States District Court for the Eastern District of Pennsylvania in Philadelphia, charging Sandoz with participating in four criminal antitrust conspiracies, each with a competing manufacturer of generic drugs and various individuals.  This represents the third pharmaceutical company to admit to criminal antitrust charges in the Antitrust Division’s ongoing investigation.  The charged conspiracies took place between 2013 and 2015.

The Antitrust Division also announced a deferred prosecution agreement resolving the charges against Sandoz, under which the company agreed to pay a $195 million criminal penalty and admitted that its sales affected by the charged conspiracies exceeded $500 million.  Under the deferred prosecution agreement, Sandoz has agreed to cooperate fully with the Antitrust Division’s ongoing criminal investigation.  As part of the agreement, the parties will file a joint motion, which is subject to approval by the Court, to defer for the term of the DPA any prosecution and trial of the charges filed against the defendant.

“Today’s resolution, with one of the largest manufacturers of generic drugs, is a significant step toward ensuring that prices for generic drugs are set by competition, not collusion, and rooting out antitrust crimes that cheated American purchasers of vital medicines,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “Sandoz conspired for years with other manufacturers and their executives to raise prices for critical medications, and the Antitrust Division will continue its ongoing investigation to hold both individuals and corporations accountable for these crimes.”

“This significant resolution is a critical step toward ensuring a free and open marketplace for the competitive pricing of generic drugs,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General.  “The outstanding work by the legal and investigative teams effectively quashed an environment of bid rigging, market allocation and price fixing within the generics industry.  Along with our partners at the Department of Justice’s Antitrust Division and the Federal Bureau of Investigation, the U.S. Postal Service Office of Inspector General will continue to aggressively investigate this type of detrimental behavior.” 
“This resolution demonstrates the continued dedication of the FBI and our partners to root out collusion and dishonest business practices within the pharmaceutical industry, on behalf of the American people,” said Timothy M. Dunham, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division.  “We will not turn a blind eye while companies and executives pad their pocketbooks.  The FBI will continue to fight for the public to have access to a competitive marketplace of medications that Americans count on.”

“When a pharmaceutical company participates in bid-rigging and price-fixing, the entire community suffers,” said US Attorney William M. McSwain for the Eastern District of Pennsylvania.  “My Office will continue to work with the Department of Justice and all of our law enforcement partners to ensure that prices for medicine are set legally, and not through illegal means to benefit pure greed.”