Health Law Daily Wrap Up, ANTITRUST—D. Conn.: 45 states granted summary judgment against Sandoz and Taro in generic drug price-fixing conspiracy, (Jul 25, 2025)

By Martin A. Steinberg, J.D.

Thirty-six generic drug companies allegedly participated in a conspiracy to fix prices, allocate customers, and rig bids for numerous generic dermatological drugs.

The federal district court in Hartford, Connecticut, granted partial summary judgment in favor of the Attorneys General from 45 states and four U.S. territories in a suit against Sandoz Inc., Taro Pharmaceuticals USA, Inc., and former Sandoz executive Hector Armando Kellum. The court found these defendants liable under the Sherman Act and analogous state antitrust laws for conspiring to fix prices, allocate customers, and rig bids for certain generic dermatological drugs, specifically clobetasol, desonide ointment, and nystatin triamcinolone cream. The ruling relied heavily on admissions previously made by the defendants in deferred prosecution and plea agreements in related criminal proceedings, as well as their binding admissions under Rule 36 in civil discovery. The Court rejected the defendants' attempts to dispute or withdraw these admissions, holding that they conclusively established a per se antitrust violation. The decision explicitly notes that it addresses only the liability element of the plaintiffs' claims, reserving questions of injury, causation, damages, geographic scope, constitutional issues, and affirmative defenses for later proceedings (State Of Connecticut v. Sandoz, Inc., No. 3:20-cv-00802-MPS (D. Conn. July 21, 2025)).

Background. This is one of three cases in which the Attorneys General of the States and territories have sued scores of defendants in the generic drug industry for alleged antitrust violations and unfair trade practices. They are alleging that 36 generic drug manufacturers and individuals engaged in price fixing, market allocation, and bid rigging related to generic dermatological drugs. Initially filed in the District of Connecticut, this case was consolidated with other similar lawsuits in a multidistrict litigation (MDL) in the Eastern District of Pennsylvania before being remanded back to the District of Connecticut. The plaintiffs' operative complaint, known as the "Dermatology Complaint," alleges various conspiracies involving approximately 80 generic drugs. The September 9, 2021, Amended Complaint spans 609 pages and comprises 2,123 numbered paragraphs.

Plaintiffs’ motion for summary judgment sought judgment on Count 1 against Sandoz, Count 2 against Taro, Count 23 against Kellum, and Count 28 state-law claims against Sandoz, Taro, and Kellum. The motion sought partial summary judgment only as to conspiracies on three: clobetasol cream, emollient cream, gel, ointment, and solution formulations, desonide ointment, and nystatin triamcinolone cream. Specifically, the States argued that there was no genuine issue of material fact as to whether Sandoz and Taro conspired from March 2013 until December 2015 to fix prices and allocate customers for these drugs. The States also argued that there was no genuine issue of material fact as to whether Kellum, a former Sandoz employee, conspired from March 2013 to June 2015 to fix prices and allocate customers for clobetasol and nystatin triamcinolone cream.

Prior admissions. The States’ motion rests entirely on whether the Defendants have each admitted to the conspiracies, either through (1) Sandoz and Taro’s deferred prosecution agreements (DPAs) and Kellum’s plea agreement in the face of federal criminal charges; or (2) through the Sandoz and Taro each previously entered into DPAs with the U.S. Department of Justice, explicitly acknowledging responsibility for anticompetitive conduct involving price fixing, customer allocation, and bid rigging related to these drugs from March 2013 to December 2015. Kellum separately pleaded guilty to a criminal conspiracy to rig bids and allocate customers involving at least clobetasol and nystatin triamcinolone cream. These criminal admissions explicitly identified co-conspirators, described the nature of the conspiracy, and outlined specific anticompetitive actions taken by the defendants.

Beyond their criminal admissions, Sandoz, Taro, and Kellum made corresponding civil admissions under Rule 36 during discovery in the civil litigation, adopting facts from their criminal resolutions. After the DPAs expired, Taro attempted to withdraw and amend its civil admissions. Still, the court rejected this request, finding that withdrawal would prejudice the plaintiffs, and that Taro failed to provide good cause for its delay. The court thus ruled that these admissions were binding, conclusively establishing critical factual elements of the plaintiffs' antitrust claims for the purposes of summary judgment.

Scope. The court clarified that the motion pertained only to the violation or "per se liability" of the antitrust claims under federal law (Counts 1, 2, and 23) and analogous state-law claims (Count 28). The plaintiffs' motion sought to establish solely whether the defendants' conduct, specifically horizontal agreements to fix prices, allocate markets, and rig bids, constitutes a per se antitrust violation, without yet addressing issues of injury, causation, damages, or affirmative defenses. The court explicitly rejected the defendants' arguments that the plaintiffs' omission of these other elements from their motion rendered it deficient.

Summary judgment on this limited aspect was appropriate under Rule 56, as partial summary judgment can be granted on discrete components of claims when doing so simplifies and clarifies issues for trial. The court noted that horizontal agreements among competitors, such as those admitted by the defendants, are considered per se illegal under antitrust laws, which makes them appropriate for separate resolution apart from more complex elements like causation or damages.

Additionally, the court did not intend this ruling to extend beyond defendants Sandoz, Taro, and Kellum, the drugs clobetasol, desonide ointment, and nystatin triamcinolone cream, and the timeframes identified in the plaintiffs’ summary judgment motion. It also explicitly excluded from this ruling any determination regarding the scope of broader alleged conspiracies, the full roster of co-conspirators, duration, or any overarching conspiracy allegations raised elsewhere in the litigation. Regarding the state law claims, the motion only sought judgment as to the antitrust state-law claims identified in Count 28. It did not seek adjudication of the violation element of the consumer protection, unjust enrichment, or any other types of claims raised in the operative complaint.

Civil admissions. The court noted that Sandoz, Taro, and Kellum each explicitly admitted, through responses to requests for admission (RFAs), their participation in conspiracies involving price fixing, bid rigging, and market allocation related to specific generic dermatological drugs. These admissions, mirroring prior criminal admissions, conclusively established that the defendants had engaged in unlawful antitrust conduct, thus satisfying the element of violation required for the plaintiffs' claims.

The defendants' attempts to contest or contradict these admissions by presenting additional evidence or arguments were firmly rejected by the court. Specifically, the court found that Rule 36 admissions are binding unless formally withdrawn or amended, a step previously denied to Taro due to undue delay and prejudice, and not pursued by Sandoz or Kellum. Allowing the defendants to introduce conflicting evidence at this stage would undermine Rule 36’s purpose of streamlining litigation and eliminating unnecessary factual disputes.

Finally, the court dismissed defendants' arguments that their admissions were compelled by criminal plea and deferred prosecution agreements, noting that such admissions were knowingly made with an understanding of their potential consequences in parallel civil litigation. The court concluded by explicitly establishing, as a matter of law, that each defendant participated in unlawful antitrust conspiracies related to the specific generic drugs and periods at issue, thereby affirming these facts as conclusively established for the remainder of the litigation.

State law claims. The court noted that, while the plaintiffs did not extensively brief the elements of each state's antitrust statutes, the defendants' admitted conduct regarding price-fixing, market allocation, and bid-rigging is universally recognized as illegal under antitrust laws across all states. Thus, the court concluded it was unnecessary for plaintiffs to provide detailed state-specific analyses at this stage, because the defendants’ explicit admissions conclusively establish violations under these widely accepted antitrust principles.

To further clarify, the court provided illustrative examples from five geographically diverse states (Connecticut, California, Minnesota, Kansas, and Mississippi), demonstrating how the defendants’ admitted conduct clearly constituted violations of each state's antitrust statute. These examples reinforced the court’s conclusion that the conduct admitted to by defendants is paradigmatic of antitrust violations and universally prohibited.

Finally, the court left open other issues such as injury, causation, damages, geographic scope limitations, and potential constitutional challenges. The defendants may seek reconsideration if they genuinely believe that specific state laws do not prohibit their admitted conduct; however, the court cautioned against raising arguments related to geographic limitations or constitutional doctrines, which were beyond the scope of the present ruling.

Motions to seal. The court granted motions to seal briefs and exhibits related to the motion for partial summary judgment.

The Case is No. 3:20-cv-00802-MPS.

Judge: Shea, M.

Attorneys: Allison Frisbee, Office of the Attorney General, for State of Connecticut. Robert Bernheim, Office of the Attorney General, for State of Arizona. Ian L. Papendick, Office of the Colorado Attorney General, for State of Colorado. Ada Anon (Arnold & Porter Kaye Scholer LLP) for Sandoz, Inc. Jill M. O'Toole (O'Toole & O'Toole PLLC) for Actavis Holdco U.S., Inc. Bennet J. Moskowitz (Troutman Pepper Hamilton Sanders LLP) for Amneal Pharmaceuticals, Inc.

Companies: Sandoz, Inc.; Actavis Holdco U.S., Inc.; Amneal Pharmaceuticals, Inc.

Cases: CaseDecisions AntitrustNews DrugBiologicNews PrescriptionDrugNews ConnecticutNews