The China Mail - Sandoz strikes US settlements to resolve generic drug price dispute

Sandoz and its subsidiary Fougera Pharmaceuticals reached an agreement with a consortium representing 43 US states and territories, to whom $400 million will be paid over seven years, the generic and biosimilar drug manufacturer said in a statement.

The payments are due to begin in 2027, "in exchange for a full release of all claims the US states and territories asserted against it and its affiliates", the Basel-based group said.

"This agreement contains no admission of wrongdoing by Sandoz US.

"The resolution of these claims requires an additional payment of approximately $50 million to states that settled earlier, making a total payment of approximately $450 million."

The Swiss group also reached a settlement agreement with indirect resellers, under which Sandoz US will pay $28.5 million.

This agreement, again with no admission of wrongdoing, resolves disputes with pharmacies, clinics, hospitals, and other entities that resold medicines to consumers.

"The only remaining antitrust claims against the company in the US generic antitrust litigation are those brought by individual plaintiffs who opted out of class settlements," said Sandoz.

The Zurich Cantonal Bank said in a market commentary that the settlement "brings clarity" to a protracted legal dispute, where the litigation has been disclosed as a risk factor in every annual report since 2016.

"With this settlement, Sandoz... reduces potential risks for the future," ZKB analysts said.

- US DoJ probe -

From 2016, several generic drug manufacturers were targeted by a US Department of Justice investigation for suspected price-fixing.

In 2020, Sandoz -- which was later spun off by the Swiss pharmaceutical giant Novartis in 2023 -- reached an agreement with the DoJ in exchange for a $195 million penalty.

Sandoz said the two agreements announced Monday had no impact on its financial forecasts, either for 2026 or in the medium term, given provisions already set aside.

President Donald Trump has been pushing to lower drug prices in the United States.

On July 21, Trump announced steep tariffs on imported generic drugs from August 2028 -- a move he said was aimed at onshoring production of such pharmaceutical products.

"Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for a two year period of time, after which the TARIFF will be raised to 100% for a one year period of time, and 200% thereafter," he said on his Truth Social platform.

A.Kwok--ThChM