Sun Preliminarily Settles Direct Purchaser Claims for Price-Fixing Generic Drugs for $85 million

Two U.S. subsidiaries of Indian pharmaceutical company Sun Pharma announced preliminary settlements with a putative class of direct purchasers in the generic price-fixing multidistrict litigation pending in the U.S. District Court for the Eastern District of Pennsylvania. Taro Pharmaceuticals USA Inc. and Sun Pharmaceutical Industries Inc. will pay a total of $85 million to resolve the direct purchaser claims. This amount will be reduced by close to $8 million if 20 percent or more of direct purchasers by volume opt out of the settlement. The settlement is subject to approval by the Court and certification of a settlement class. This settlement follows a $213.2 million settlement by Taro with the U.S. Department of Justice to resolve False Claims Act claims arising from the same price-fixing conspiracy. Sun has not reached a settlement with the state attorneys general, other putative classes (the end payors and independent retailers), or the direct action plaintiffs.

In the generics price fixing MDL, various state attorneys general, the classes, and the direct action plaintiffs allege that dozens of generic manufacturers colluded for years to fix the prices of generic drugs by: (1) agreeing to increase prices in unison; and (2) allocating the market by trading off customers to ensure that each of the manufacturers selling a particular generic drug had its “fair share” of the market as determined by order of entry. One sub-conspiracy relates to a subset of the defendants, including Taro and Sun, that purportedly compete in the markets for certain topical dermatological drugs. Judge Rufe has chosen this aspect of the conspiracy to be tried first as a bellwether.

This is the first publicly-announced settlement in the generics price fixing MDL. Schneider Wallace Cottrell Konecky LLP are counsel for several direct action plaintiff health plans in that case. 

In re: Generics Pharmaceuticals Pricing Anti. Litig., No: 2:16-md-02724 (E.D. Pa.)