New Jersey joins multistate lawsuit alleging prescription drug price fixing by Novartis, Sandoz
TRENTON, N.J. — New Jersey has joined a multistate lawsuit against pharmaceutical giant Novartis AG and its generic drug subsidiaries, alleging a widespread conspiracy to fix prices and drive up the cost of prescription drugs for patients.
Acting Attorney General Jennifer Davenport and the Division of Consumer Affairs announced that New Jersey filed a complaint alongside 42 states and territories against Novartis AG, Sandoz AG and Sandoz Group AG. The lawsuit alleges the companies conspired with other generic drug manufacturers to fix prices, allocate markets and rig bids for 31 generic drugs.
According to the complaint, the alleged scheme inflated prices across the health insurance market, including taxpayer-funded programs such as Medicare and Medicaid, as well as for individual consumers paying out of pocket for medications. The lawsuit also alleges Novartis fraudulently transferred and drained assets from Sandoz and later spun off the company in an effort to shield itself from liability in earlier antitrust cases.
“The rising cost of health care continues to be a major driver of our affordability crisis. That’s why I’m committed to holding prescription drug companies accountable when their conduct violates the law and increases costs for New Jerseyans,” Davenport said. “As Attorney General, I am committed to making life more affordable for New Jerseyans, and I will continue to fight to keep prescription drug prices down for all residents.”
“Prescription drug pricing is extremely opaque, and Novartis’s conduct is one of the most egregious examples of conspiratorial drug price fixing we have ever seen,” said Jeremy E. Hollander, acting director of the Division of Consumer Affairs. “Generic drugs are intended to save patients money, and these actions did the exact opposite.”
The complaint describes what officials called an interconnected network of industry executives who allegedly coordinated pricing through frequent communications and meetings. The case is based on evidence gathered from cooperating witnesses, more than 20 million documents and extensive phone records involving hundreds of sales and pricing officials in the generic drug industry, according to the filing.
The lawsuit builds on three earlier multistate antitrust complaints filed by New Jersey and its partners. Those cases involved dozens of corporate and individual defendants and focused on a range of generic drugs, including topical medications accounting for billions of dollars in U.S. sales. The latest complaint seeks to link Novartis and Sandoz to those prior actions.
The complaint alleges that before Oct. 4, 2023, Sandoz operated as a wholly owned subsidiary of Novartis and functioned as its agent in the sale of generic pharmaceuticals in the United States. Prosecutors allege the spinoff of Sandoz was intended to conceal profits derived from the alleged conspiracy.
The lawsuit alleges violations of federal and state antitrust laws, the New Jersey Consumer Fraud Act and the New Jersey Uniform Voidable Transactions Act.
States and territories joining New Jersey in the complaint include California, New York, Pennsylvania, Massachusetts, Illinois, Michigan, Virginia, Washington and Wisconsin, among others.
