When federal prosecutors nabbed a guilty plea from a former exec at Novartis’ Sandoz in an expansive price-fixing probe, it seemed to spell trouble for the massive generics player. Now, the other shoe has dropped for Novartis––to the tune of $195 million and an extraordinary confession––and more could be on the way.
Novartis agreed Tuesday to pay $195 million and enter deferred prosecution to settle federal claims it colluded in an industrywide price-fixing scheme between 2013 and 2015, the U.S. Department of Justice said.
The criminal settlement is the single largest domestic antitrust deal ever signed, the DOJ said in a release, and it comes two weeks after a former Sandoz unit exec pleaded guilty to federal conspiracy charges in the scheme.
As part of its agreement, Novartis admitted “its sales affected by the charged conspiracies exceeded $500 million,” the DOJ said in a release, and it agreed to cooperate in the department’s ongoing investigation.
Novartis is also in discussions to settle claims with the DOJ’s civil division and has provisioned an additional $185 million for that effort, the company said in a release.
“We take seriously our compliance with antitrust laws, and in reaching today’s resolution, we are not only resolving historical issues but also underscoring our commitment to continually improving our compliance and training programs and evolving our controls,” Sandoz President Carol Lynch said. “We are disappointed that this misconduct occurred in the face of our clear antitrust compliance policies and multiple trainings––and in full contravention of the company’s values.”
RELATED: Former Novartis exec pleads guilty in generics price-fixing conspiracy
In February, Hector Armando Kellum, a former senior executive at Sandoz, pleaded guilty to federal conspiracy charges for his role in a scheme to fix prices for a range of the drugmaker’s products, including topical steroid clobetasol and antifungal nystatin triamcinolone cream.
Kellum faces 10 years in prison and a $1 million fine, prosecutors said in a release. In exchange for his plea, Kellum agreed to cooperate with the ongoing federal investigation.
Kellum’s deal came just two weeks after prosecutors charged Ara Aprahamian, a former sales executive at Taro Pharma. Aprahamian was charged Feb. 4 with three counts of conspiring to fix prices for the company’s generic drugs and lying to investigators.
