Sandoz Agree $265 Million U.S. Settlement
Sandoz Inc. and its subsidiary Fougera Pharmaceuticals Inc. both indirect subsidiaries of Sandoz Group AG – have entered into a settlement agreement with the class of direct purchaser plaintiffs in the multidistrict litigation entitled In re Generic Pharmaceuticals Pricing Antitrust Litigation in the US District Court for the Eastern District of Pennsylvania.
This agreement, which contains no admission of wrongdoing by Sandoz US, resolves all of the damages claims of the direct purchaser class, which is the only class of plaintiffs that purchased directly from Sandoz US and brought their claims under federal law. Under the terms of the agreement, Sandoz US will pay $265 million in exchange for a full release of all claims asserted against it in the direct purchaser class action by the settlement class members. The full amount of the payment will be included in the company’s 2023 financial results.
As a new public company, this settlement underscores the Sandoz commitment to integrity and sound governance, and is an encouraging step toward putting allegations of legacy conduct behind us.
Beyond the payment, settlement terms include:
- A broad release of claims that covers alleged conduct between 2009 and 2019 as well as all medicines at issue in the direct purchaser class claims.
- Class members have the right to opt out of the settlement, which could result in the settlement amount being reduced on a pro rata basis by up to 12 percent, or $31.8 million, based on the aggregate dollar sales of the generic pharmaceutical products at issue.
- Sandoz US also has the option to terminate the settlement if opt-outs reach a certain pre-determined threshold.
The settlement is subject to Court approval, as is required for class settlements under US law. If the Court preliminarily approves the settlement, class members will be notified of the settlement and given an opportunity to opt out of the class, object to the settlement, and file a claim to receive a settlement payment.
Following approval of this settlement, the multidistrict litigation, which was disclosed in the August 18, 2023 Listing Prospectus, will have two remaining plaintiff classes, but they concern indirect and downstream purchases and damages claims under state law. Sandoz US continues to defend itself vigorously in those cases, and has raised a number of defences, including whether downstream purchasers were actually damaged due to the alleged conduct.