A four count felony charge was filed yesterday in the United States District Court for the Eastern District of Pennsylvania in Philadelphia, charging Sandoz with participating in four criminal antitrust conspiracies, each with a competing manufacturer of generic drugs and various individuals.
This represents the third pharmaceutical company to admit to criminal antitrust charges in the Antitrust Division’s ongoing investigation.
The charged conspiracies took place between 2013 and 2015.
The Antitrust Division also announced a deferred prosecution agreement resolving the charges against Sandoz, under which the company agreed to pay a $195 million criminal penalty and admitted that its sales affected by the charged conspiracies exceeded $500 million.
Under the deferred prosecution agreement, Sandoz has agreed to cooperate fully with the Antitrust Division’s ongoing criminal investigation.
As part of the agreement, the parties will file a joint motion, which is subject to approval by the Court, to defer for the term of the DPA any prosecution and trial of the charges filed against the defendant.
In the deferred prosecution agreement, Sandoz admitted that it participated in the charged antitrust conspiracies, as follows:
Count One charges Sandoz for its role in a conspiracy with a generic drug company based in New York and other individuals.
Sandoz admitted that drugs affected by this conspiracy included clobetasol (cream, emollient cream, gel, ointment, and solution), desonide ointment, and
ystatin triamcinolone cream.
Count Two charges Sandoz for its role in a conspiracy with Kavod Pharmaceuticals LLC (formerly known as Rising Pharmaceuticals) to allocate customers and fix prices of benazepril HCTZ.
Rising was charged and entered into a deferred prosecution agreement in December 2019 for its participation in the same conspiracy.
Count Three charges Sandoz for its role in a conspiracy with a generic drug company based in Michigan.
Sandoz admitted that drugs affected by this conspiracy included desonide ointment.
Count Four charges Sandoz for its role in a conspiracy with a generic drug company based in Pennsylvania.
Sandoz admitted that drugs affected by this conspiracy included tobramycin inhalation solution.
Today’s case is the seventh to be filed in the Antitrust Division’s ongoing investigation into the generic pharmaceutical industry.
Sandoz is the third company to be charged; the previous two companies also entered into deferred prosecution agreements.
Four individual charges have been filed in the investigation.
Three executives have pleaded guilty, including former Sandoz executive Hector Armando Kellum.
Ara Aprahamian, a former executive of a company based in New York, was indicted in February 2020 and is awaiting trial.
The charged offense carries a statutory maximum penalty of a $100 million fine per count for corporations, which may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million. ■