New Jersey has joined a coalition of 42 states and territories in filing a multistate lawsuit against Novartis AG and its generic drug subsidiaries, Sandoz AG and Sandoz Group AG, alleging the companies participated in a broad conspiracy to fix prices and manipulate the market for dozens of generic prescription drugs.
According to the complaint, the companies coordinated with other generic drug manufacturers to fix prices, allocate customers, and rig bids for 31 widely used generic medications. State officials say the alleged conduct drove up costs for patients in New Jersey and across the country, affecting people with private insurance, patients covered through Medicare and Medicaid, and those paying out of pocket for prescriptions.
The filing alleges the conspiracy was supported by extensive communications among industry executives, including meetings, phone calls, and other exchanges designed to reduce competition and keep prices artificially high. Investigators said the case draws on evidence that includes cooperating witnesses, more than 20 million documents, and millions of phone records involving hundreds of sales and pricing employees across the generic drug industry.
The lawsuit also alleges that Novartis tried to shield itself from legal liability by transferring assets and spinning off Sandoz in 2023, even though the complaint describes the companies as having operated for years as a single integrated entity. According to the states, the spinoff was structured in a way that drained assets from Sandoz while leaving it exposed to growing antitrust liabilities tied to earlier litigation.
“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,” DCA Acting Director Jeremy E. Hollander said in the state’s announcement. “Generic drugs are intended to save patients money, and these actions did the exact opposite.”
New Jersey and its multistate partners have already filed three related complaints targeting other manufacturers and executives in the generic drug industry. Those earlier cases focused on overlapping conspiracies involving oral, injectable, and topical generic drugs representing billions of dollars in U.S. sales. The new complaint ties Novartis and Sandoz to that broader set of cases, alleging they participated in the same overarching scheme.
The lawsuit alleges violations of federal antitrust law, the New Jersey Consumer Fraud Act, and the New Jersey Uniform Voidable Transactions Act. It seeks injunctive relief, civil penalties, and other remedies intended to restore competition and recover alleged overcharges paid by states, insurers, and consumers.
Joining New Jersey in the case are states and territories including New York, Pennsylvania, California, the District of Columbia, and Puerto Rico, among others. The lawsuit was filed in federal court in Connecticut and is being handled for New Jersey by the Division of Law’s Antitrust Section under the supervision of senior state attorneys.