Antitrust Law Daily Wrap Up, ANTITRUST—D. Conn.: Generic drug maker Apotex’s settlement over price-fixing receives preliminary approval, (May 15, 2025)

By Brian Craig, J.D.

The $39.1 million settlement involving the generic drug manufacturer includes $17.6 million to consumers and $9.7 million to state entities.

Generic drug manufacturer Apotex’s proposed $39.1 million with the Attorneys General of most U.S. States to resolve claims of alleged price-fixing has received preliminary approval by the federal district court in Hartford, Connecticut. The court found that the proposed settlement—that allocates $17.6 million to consumers, $9.7 million to state entities, and the remainder for administration costs and litigation costs—is fair and reasonable. Separately, the court also imposed sanctions against the State of Missouri resulting in dismissal (with a possibility of that dismissal being vacated) of the state from the lawsuit because of Missouri’s disregard of the discovery orders (State Of Connecticut v. Aurobindo Pharma USA, Inc., No. 3:16-cv-02056-MPS (D. Conn. May. 12, 2025)).

In a 2019 complaint, the Attorneys General of most U.S. states and several territories (collectively, “the States”) brought a “sprawling action alleging price-fixing, market allocation, and bid rigging in the sale of generic drugs.” This case, referred to as the “Heritage case,” involves allegations that nineteen defendants selling fifteen generic drugs allocated customers, fixed prices, and rigged bids. This case was originally filed in Connecticut but transferred to the Eastern District of Pennsylvania by the Judicial Panel on Multidistrict Litigation. The case was remanded to the federal district court in Connecticut in April 2024.

The complaint alleged collusion in the sale of fifteen generic drugs. On February 7, 2025, the court denied motions to dismiss brought by six pharmaceutical company defendants—Apotex Corp., Ascend Laboratories, Glenmark Pharmaceuticals Inc., Lannett Company, Mayne Pharma, and Zydus Pharmaceuticals. In denying the motion to dismiss, the court found that the States’ complaint alleged enough facts to plausibly allege that each of the six individual defendants joined both an “individual drug conspiracy and the overarching conspiracy.” Following denial of the motion to dismiss, the States and Apotex motioned for preliminary approval of a proposed $39.1 million settlement. The proposed settlement, as detailed in the supporting memorandum of law, only involves Apotex.

Settlement terms. The court gave preliminary approval for the $39.1 million settlement with Apotex. The preliminary settlement allocates 70% of the $39.1 million State Settlement Amount to restitution to Consumers and State Entities, and 30% to payment for the States’ settlement notice and administration costs and litigation costs. Furthermore, the court found that the proposed allocation of settlement funds between Consumers and State Entities is fair and reasonable under the circumstances of this case. The court granted preliminary approval of the proposed allocation of $17,624,403.04, representing approximately 45.08% of the State Settlement Amount to Consumers, and $9,745,596.96, or approximately 24.92% of the State Settlement Amount, to State Entities.

The court approved Huntington Bank to serve as escrow agent and Rust Consulting Inc. as the notice and claims administrator for the settlement. Any comments or objections to the settlement must be received by July 24, 2025. Furthermore, eligible consumers may opt out of the settlement or comment on and object to the settlement no later than July 24, 2025. The claims administrator will publish notice on a dedicated website at www.AGGenericDrugs.com with information for consumers. The court stayed all proceedings against Apotex with approval of the preliminary settlement, but the case will continue against the other pharmaceutical companies.

Sanctions against Missouri. Separately, after the defendants had moved for sanctions against the State of Missouri on September 6, 2024, the court imposed severe sanctions against the state resulting in its dismissal from the action for noncompliance and repeated disregard of the court’s discovery orders. However, the court also issued instructions for the possible vacatur of those sanctions. The court recognized that Missouri received multiple chances to comply with the underlying discovery requests and court orders, and that Missouri failed to even file any indication of compliance. Missouri previously failed to comply with an order compelling production of documents. In an earlier ruling, the court could not find any good reason for the dispute being dragged on for so long and for so many filings.

In its May 12 order dismissing Missouri from the action, the court stated that it would “vacate this order dismissing Missouri's action if, and only if, (1) by May 19, 2025, the State of Missouri files a sworn statement demonstrating to the Court, in detail, that it has in fact complied with this Court's July 15, 2024 order, and (2) by May 26, 2025, the Defendants have filed a statement to the effect that (a) they agree that the State of Missouri has complied with this Court's July 15, 2024 order, and (b) they have received a check or other payment from the State of Missouri fully compensating them for the time and expenses they incurred in filing the motion for sanctions and the reply.”

The Case is No. 3:16-cv-02056-MPS.

Judge: Shea, M.

Attorneys: Allison Frisbee, Office of the Attorney General, for State of Connecticut. Michael Clarke, Delaware Department of Justice, for State of Delaware. Timothy M. Fraser, Office of the Attorney General, for State of Florida. Benjamin H. Diessel (Wiggin and Dana LLP) for Aurobindo Pharma U.S., Inc. Christine C. Levin (Dechert LLP) for Citron Pharma, LLC. Christopher B. Leach (Gibson, Dunn & Crutcher LLP) for Heritage Pharmaceuticals, Inc.

Companies: Aurobindo Pharma U.S., Inc.; Citron Pharma, LLC; Heritage Pharmaceuticals, Inc.

Cases: Antitrust ConnecticutNews