Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: Court approves settlement of up to $275M in generic drug pricing class action, (Sep 29, 2025)

By Patricia K. Ruiz, J.D.

The court accepted that there are strategic reasons for pursuing a non-consumer class in the initial bellwether cases while including consumers in the settlement class.

The U.S. District Court for the Eastern District of Pennsylvania granted final approval to a settlement between a class of end-payer plaintiffs (EPPs) and settling defendants Sandoz Inc. and Fougera Pharmaceuticals for a monetary payment of between $230 million and $275 million. The court determined the proposed class-action settlement is fair, reasonable, and adequate (In Re: Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2:16-md-02724-CMR (E.D. Pa. Sept. 26, 2025)).

Background. In December 2024, the EPPs and Sandoz agreed to the largest settlement to date in this MDL. Fougera is also a party to the settlement agreement, but all parties have generally referred to the proposed settlement as the EPP/Sandoz settlement. The end payer class comprised "end-purchasers" including consumers who bought Sandoz drugs from pharmacies and institutions such as the City of Providence and a New York City police benefits plan. The proposed settlement, preliminarily approved by the court on February 19, 2025, defines the class as "[a]ll persons and entities in each of the 50 United States (except Indiana and Ohio), as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands, that indirectly purchased, paid and/or provided reimbursement for some or all of the purchase price for any Drugs at Issue, other than for resale, from May 1, 2009, through December 31, 2019."

Specifically, the end payer plaintiffs class includes the following entities: 1199SEIU Greater New York Benefit Fund; 1199SEIU Licensed Practical Nurses Welfare Fund; 1199SEIU National Benefit Fund; 1199SEIU National Benefit Fund for Home Care Workers; American Federation of State, County and Municipal Employees District Council 37 Health & Security Plan; American Federation of State, County and Municipal Employees District Council 47 Health & Welfare Fund; City of Providence, Rhode Island; Detectives Endowment Association of the City of New York; Hennepin County; Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana; Philadelphia Federation of Teachers Health and Welfare Fund; Self-Insured Schools of California; Sergeants Benevolent Association of the Police Department of the City of New York Health and Welfare Fund; UFCW Local 1500 Welfare Fund; Uniformed Fire Officers Association Family Production Plan Local 854; and United Food & Commercial Workers and Employers Arizona Health & Welfare Trust.

The District Court granted preliminary approval, and a fairness hearing under Rule 23 was scheduled for July 23, 2025. The first EPP trial, which would have included Sandoz but for the settlement, was set to begin on August 4, 2025.

Settlement approval. To approve the settlement, the court must: (1) determine if the requirements for class certification under Rule 23(a) and (b) are satisfied; (2) assess whether notice to the proposed class was adequate; and (3) evaluate if the proposed settlement is fair under Rule 23(e).

To certify the class, the court must first determine under Rule 23(a) that the following factors are met—numerosity, commonality, typicality, and adequacy of representation. Next, the court must determine whether the settlement class also satisfies at least one of the three requirements listed in Rule 23(b). The court determined the Rule 23(b) relevant factor is whether “the question of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The court must consider: (1) the class members’ interests in individually controlling the prosecution or defense of separate actions; (2) the extent and nature of any litigation concerning the controversy already begun by or against members of the class; and (3) the desirability or undesirability of concentrating the litigation of the claims in the particular forum.

In the Third Circuit, Rule 23(b)(3) also requires that the class be currently and readily ascertainable based on objective criteria, the determination of which has two factors: (1) the class is defined with reference to objective criteria; and (2) there is a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.

Class certification. The court certified the settlement class, finding no dispute as to numerosity, as there are many thousands of potential class members geographically dispersed throughout the U.S. Further, the court found there are common issues of law and fact as to all class members—that they purchased generic pharmaceuticals that were priced higher than they should have been because of an alleged conspiracy among manufacturers, including the settling defendants. The court then found that the typicality requirement is met, as the representative parties will fairly and adequately protect the interests of the class. Finally, the court found class counsel are qualified, experienced, and fully capable of litigating the class members’ claims.

The court explained that it accepts there are strategic reasons for pursuing a non-consumer class in the initial bellwether cases while including consumers in the settlement class. There is some burden on consumer class members to present proof of purchase showing one payment for each of the drugs claimed; however, they do not need proof of each purchase. A consumer who can demonstrate one payment for a drug can then make a claim for all payments for that drug. Given the number of drugs at issue in the settlement, the court explained, this is a reasonable requirement to deter fraudulent claims.

Turning to Rule 23(b), the common questions of class members predominate over any individual issues as all class members were allegedly harmed in the same way by paying increased prices for generic drugs. The court further concluded that, considering all of the relevant factors, this class action settlement is superior to other options. Thus, the court certified the settlement class for purposes of the final settlement.

Notice; fairness. The court determined that notice requirements were met and that the settlement is fair and reasonable. As all the applicable requirements have been met, the court approved the settlement.

The Case is No. 2:16-md-02724-CMR.

Judge: Rufe, C.

Attorneys: Jessica Lynn Kuehn, Office of the Attorney General, for Commonwealth of Pennsylvania. Jason H. Kim (Schneider Wallace Cottrell Kim LLP) for Health Care Service Corp. Peter D. St. Phillip (Lowey Dannenberg, P.C.) for Molina Healthcare, Inc. Regina Marie Calcaterra (Calcaterra Pollack LLP) for County of Suffolk. Abram J. Ellis (Simpson Thacher & Bartlett LLP) for McKesson Medical-Surgical, Inc. Adam C. Hemlock (Weil, Gotshal and Manges LLP) for Torrent Pharma, Inc. Jan P. Levine (Troutman Pepper Hamilton Sanders LLP) for Hikma Labs, Inc.

Companies: Health Care Service Corp.; Molina Healthcare, Inc.; McKesson Medical-Surgical, Inc.; Torrent Pharma, Inc.; Hikma Labs, Inc.

Cases: Antitrust PennsylvaniaNews