Antitrust Law Daily Wrap Up, ANTITRUST—D. Conn.: States win preliminary approval of $400M Sandoz generic drug price-fixing settlement, (Oct 19, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Sandoz's total settlement payouts in the generic pharmaceutical antitrust litigation cases brought by U.S. state attorneys general could top $1 billion.

The federal district court in Hartford, Connecticut has granted preliminary approval to a settlement agreement between generic drug manufacturers Sandoz Inc. and Fougera Pharmaceuticals Inc. (collectively “Sandoz”), and a consortium of state attorneys general. The settlement requires Sandoz to pay a Total Settlement Amount of $400 million dollars. Approximately 70% of the Total Settlement Amount, which equals $280 million dollars, and twenty-five cents, is designated by the plaintiff States as restitution. The remaining 30% of the Total Settlement Amount, approximately $120 million, will be held by the States to be used for payment of any and all attorney fees and costs. As for injunctive relief, the settlement requires that Sandoz covenants for a ten-year period not to engage in unlawful price-fixing, bid-rigging, or market allocation regarding generic drugs, including any unlawful agreements with competitors to fix prices, submit courtesy, cover, or non-competitive bids, refrain from bidding, or allocate customers. The agreement, detailed in the plaintiffs’ memorandum of law in support of their motion for preliminary approval, now awaits a scheduled fairness hearing to determine whether the approval is to be finalized (State Of Connecticut v. Aurobindo Pharma USA, Inc.,No. 3:20-cv-00802-MPS (D. Conn. Oct. 1, 2026)).

Background. On August 5, 2016, the U.S. Panel on Multidistrict Litigation (MDL Panel) ordered that nine cases pending in the Eastern District of Pennsylvania and one case pending in the District of Rhode Island in which Sherman Act claims regarding the generic drugs digoxin and/or doxycycline be consolidated for pre-trial multidistrict litigation in the Eastern District of Pennsylvania. The MDL panel noted that there were additional "tag-along plaintiffs" to such litigation.

Disputes arose over how this MDL case should be captioned to reflect the scope of the litigation. At the time, the MDL Panel named the case "In re: Generic Digoxin and Doxycycline Antitrust Litigation," while acknowledging the prospects of additional cases involving other generic drugs being added in the future as asserted by some of the plaintiffs (mostly labor union member welfare funds that provided healthcare benefits to their members).

Additional cases regarding Sherman Act claims regarding other generic drugs were in fact transferred in for consolidation a few months later, and the caption of the MDL was revised accordingly [In re: Generic Pharmaceuticals Pricing Antitrust Litigation, 2:16-md-02724 (E.D. Pa. Apr. 7, 2017)].

Meanwhile, an investigation begun in July 2014 by the Connecticut Attorney General "uncovered evidence of a broad, well-coordinated and long-running series of schemes to fix the prices and allocate markets for a number of generic pharmaceuticals in the United States." Congressional inquiries and DoJ Antitrust Division investigations were commenced shortly thereafter. Joined by the attorneys general of 19 other states, the Connecticut Attorney General filed a Sherman Act complaint in the District of Connecticut against generic manufacturers of the doxycycline hyclate delayed release (Doxy DR) and glyburide pharmaceuticals on December 15, 2016. Other state attorneys general had subsequently joined in with the litigation when the First Amended Complaint was filed.

On August 3, 2017, the MDL Panel, unconvinced "that informal coordination and cooperation among the parties and courts will be sufficient to eliminate the potential for duplicative discovery, inconsistent pretrial rulings, and conflicting discovery obligations," ordered the transfer of the case, along with other cases regarding other generic drugs, for consolidation in the Eastern District of Pennsylvania. In the course of the MDL and afterward following remand to the district courts, the state attorneys general reached settlements with several defendant drug manufacturers.

The state attorneys general reached a settlement agreement to resolve and release all claims against with generic drug manufacturer Sandoz, Inc. and its related entities, including subsidiary Fougera Pharmaceuticals Inc. (collectively, Sandoz), based upon the conduct alleged in four of the cases: (1) Connecticut v. Aurobindo Pharma USA, Inc. (D. Conn. No. 3:16-cv-02056); (2) Connecticut v. Teva Pharmaceuticals USA, Inc., (D. Conn. No. 3:19-cv-00710); (3) Connecticut v. Sandoz, Inc. (D. Conn. No. 3:20-cv-00802); and (4) Connecticut v. Novartis AG (D. Conn. No. 3:26-cv-00160). The attorneys general moved for the District Court's preliminary approval of that settlement.

Preliminary approval. In their brief, the attorneys general apprised the court that the settlement agreement as proposed meets all of the standards as analyzed from both the perspective of procedural analysis of the states as parens patriae and substantive analysis perspective of the federal rules for settlement of class action cases [Fed. R. Civ. P. 23(e)]. The 43 states have cooperated with one another in a united front to zealously advocate for the eligible affected consumers. The negotiations with Sandoz were at arm's length by counsel having substantial experience in such negotiations; this experience includes negotiating prior successful and approved settlements in the MDL, thereby giving the states' negotiators a high degree of understanding and knowledge of the case and its subject matter.

The relief negotiated is adequate, and reasonably avoids the probable costs and hazards of continued litigation. One condition of the agreement requires Sandoz to cooperate with the attorneys general in the litigation that would remain pending in other as yet unresolved cases in the MDL; this will add value to the attorney generals' overall efforts to ensure proper conduct by the generic pharmaceutical industry.

Notice plans. The settlement agreement provides that notice will be given to consumers. To effect that notice, Rust Consulting, Inc (Rust), an entity having significant experience in class action claims administration, has been retained to give that notice. Rust has already set up an Internet website which provides information about the attorneys generals' cases; consumers will also have the options of contacting Rust through a toll-free telephone number and e-mail. The website will be updated to provide relevant documents for download. "Eligible Consumers need only register once to receive future information about the States' litigation(s) and receive a claim form when available."

The state laws of Washington and Idaho present special notification issues inasmuch as in those two states the attorney general has the exclusive legal ability to bring antitrust monetary relief claims on behalf of not only individual persons, but also affected corporate entities. Many of the plaintiffs are corporate entities, including employee health and welfare funds. Rust will cooperate with the attorneys general of Washington and Idaho to assist them in availing their press releases and other documents to eligible corporate entities, including a special subpage on the website.

Settlement allocation. Pending final approval, the settlement amount will be held in escrow by the attorneys general in an account at the Huntington Bank as escrow agent. The total $400 million is to be allocated 70 percent towards restitution and 30 percent to the states towards the costs of notice, administration, and litigation. Of the approximately $280 million in restitution, approximately $172 million will be allocated to consumers and approximately $100 million will go to state entities (which include state government instrumentalities and municipalities).

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

Judge: Shea, M.

Attorneys: Robert David Cheifetz (Sperling Kenny Nachwalter LLC) for State of Connecticut. Ariela Anhalt (Wiggin and Dana LLP) for Aurobindo Pharma USA, Inc.

Companies: Aurobindo Pharma USA, Inc.

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