New Jersey, along with 42 other states and territories, has filed a complaint against Novartis AG and its generic subsidiaries Sandoz AG and Sandoz Group AG. The complaint alleges that these companies participated in a scheme with other generic drug manufacturers to fix prices, allocate markets, and rig bids for 31 different generic drugs. According to the filing, this conduct increased prescription drug costs for individuals, health insurance providers, and taxpayer-funded programs such as Medicare and Medicaid.
The complaint also claims that Novartis attempted to protect itself from liability by transferring assets from Sandoz and spinning off the subsidiary after three earlier state antitrust complaints had been filed against the company.
“The rising cost of health care continues to be a major driver of our affordability crisis. That’s why I’m committed to holding prescription drug companies accountable when their conduct violates the law and increases costs for New Jerseyans,” said Acting Attorney General Jennifer Davenport. “As Attorney General, I am committed to making life more affordable for New Jerseyans, and I will continue to fight to keep prescription drug prices down for all residents.”
DCA Acting Director Jeremy E. Hollander added: “Prescription drug pricing is extremely opaque, and Novartis’s conduct is one of the most egregious examples of conspiratorial drug price fixing we have ever seen. Generic drugs are intended to save patients money, and these actions did the exact opposite.”
The case is based on evidence collected from cooperating witnesses involved in various conspiracies within the industry. Investigators have reviewed over 20 million documents as well as millions of phone records related to more than 600 sales and pricing personnel in the generics sector.
This new legal action builds on three previous complaints involving other pharmaceutical companies. The earlier cases targeted Heritage Pharmaceuticals along with 17 corporate defendants over 15 generic drugs; Teva Pharmaceuticals with 19 major generic manufacturers; and another focused on topical generic drugs accounting for billions in U.S. sales.
Before October 4, 2023, Sandoz was an indirect subsidiary through which Novartis operated its U.S. generics business. The complaint asserts that despite formal separation, both entities acted together during the alleged conspiracy period.
The current filing alleges violations of federal and state antitrust laws as well as New Jersey statutes governing consumer fraud and voidable transactions.
States joining New Jersey include Alaska, Arizona, California, Connecticut, Colorado, Delaware, District of Columbia, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont,U.S. Virgin Islands,Vermont Virginia Washington West Virginia Wisconsin Wyoming.
Deputy Attorney General Yale A. Leber handled this case under Assistant Attorney General Brian McDonough and Deputy Director Sara Gregory’s supervision.
