Major generic pharmaceutical company admits to antitrust crimes

US & World

WASHINGTON D.C. (WOWK) – The Department of Justice recently charged Sandoz Inc., a generic pharmaceutical company headquartered in New Jersey, for conspiring to allocate customers, rig bids and fix prices for generic drugs.

DOJ officials filed a four-count felony charge 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. 

The charged offense carries a statutory maximum penalty of a $100 million fine per count for corporations, which may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million. 

The Antitrust Division also announced an agreement with Sandoz, under which the company agreed to pay a $195 million criminal penalty and admit its sales affected by the charged conspiracies exceeded $500 million. 

In the agreement, Sandoz admitted it participated in conspiracies with a generic drug company in New York, with Kavod Pharmaceuticals, LLC (formerly known as Rising Pharmaceuticals), with a generic drug company based in Michigan and with a generic drug company based in Pennsylvania.

Under the agreement, Sandoz has agreed to cooperate fully with the Antitrust Division’s ongoing criminal investigation. 

Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said this resolution represents 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.”

“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,” he said.

This resolution, Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General said, is a “critical step toward ensuring a free and open marketplace for the competitive pricing of generic drugs.”

“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,” he said.

U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania said his office will continue to work with the DOJ to ensure suppliers price medications legally.

“When a pharmaceutical company participates in bid-rigging and price-fixing, the entire community suffers,” he said.

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