Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: End payer settlements with Sun Pharma and Taro approved in generic drug pricing litigation, (Jan 27, 2026)

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

Exceptions requested by certain insurance carriers to the notice requirements were approved on similar terms to those of prior settlement approvals in the ongoing multidistrict litigation.

The federal district court in Philadelphia, Pennsylvania has granted final approval of a settlement against two generic drug manufacturer defendants (who, during the litigation, merged together) in multidistrict litigation regarding the pricing of generic pharmaceuticals. The agreement was found to be fair and reasonable, and to have met all applicable requirements. The $200 million settlement fund is to be distributed to class members after payment from the fund of attorney fees, litigation expenses, and service awards (In Re: Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2:16-md-02724-CMR (E.D. Pa. Jan. 23, 2026)).

Background. Settlements had been negotiated between particular generic drug manufacturers and plaintiff classes in involving alleged price-fixing of more than 200 prescription drug medications following multidistrict consolidation of cases in 2016. Continuing the trend, an End Payer Plaintiffs (EPP) class consisting of diverse labor union and municipality benefit funds and a Blue Cross plan reached a settlement with drug manufacturers Sun Pharmaceutical Industries, Inc. (Sun) and Taro Pharmaceuticals U.S.A., Inc. (Taro) (collectively, Sun/Taro). At the time of the multidistrict consolidation, Sun was Taro's majority shareholder, but in June 2024, during the pending antitrust litigation, an acquisition transaction resulted in Taro becoming a private company wholly owned by Sun. The EPPs moved for final approval of the settlement negotiated.

Rule 23(a). The judge found that the settlement agreement fulfilled the prerequisite factors for class actions. The EPP class included entities and individuals who paid for the relevant prescription drugs during the class period, whether on their own behalf or, more commonly, for others including but not limited to members of the healthcare plans overseen by the entities during the class period.

Joinder of the thousands if not millions of individual cases would be impracticable, so the numerosity class action requisite was fulfilled. That the collusion among the drug manufacturers caused all class members purchased the drugs at supracompetitive prices fulfilled the commonality and typicality requirements, and such commonality and typicality gave adequate assurances that the class representatives would adequately assert the interests of the other class members.

While there were no objections received to the settlement, the attorneys general of certain states filed amici briefs expressing concern that the settlement might not give adequate regard to "the broader interest of each Amici State in law enforcement and fair dealing in the marketplace," and asserting that the state governments' interests in enforcing their state consumer statutes might be impeded if the states were bound by the settlement. On this issue, the court found that the attorneys general "have not shown that their parens patriae authority, whether statutory or not, supplants the ability of consumers to pursue actions for damages," and determined "any requests for the reporting of claims data, anti-suit injunctions, and potential offsets" to be premature at this stage of the litigation.

Class counsel's work in reaching the settlement agreement was given praise by the judge, and Sun/Taro's promised cooperation in carrying out the settlement agreement boded well for facilitation of "the litigation against non-settling Defendants."

Rule 23(b). The judge found that the settlement agreement resolved an appropriate type of class action. Here, Sun/Taro's alleged conduct affected all class members similarly by elevating the prices paid for the pharmaceuticals, and that a class action resolution was superior to any other litigation or alternate dispute resolution method. As required in the Third Circuit, the class was "currently and readily ascertainable based on objective criteria." Other rules established by Third Circuit case law were similarly fulfilled by the terms of the negotiated settlement.

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

Judge: Rufe, C.

Attorneys: Jessica Lynn Kuehn (Pennsylvania Office of the Attorney General) for Commonwealth of Pennsylvania. Abram J. Ellis (Simpson Thacher & Bartlett LLP) for McKesson Medical-Surgical, Inc.

Companies: McKesson Medical-Surgical, Inc.; Mutual Pharmaceuticals Co., Inc.

Cases: Antitrust PennsylvaniaNews