Sandoz Inc. will pay $400 million to settle allegations that the generic drug manufacturer conspired to fix prices and divide markets for medications used by millions of Americans, according to a settlement in principle announced by Attorney General Jennifer Davenport on Tuesday. The company did not admit wrongdoing as a condition of the settlement. That denial preserves Sandoz's legal position while allowing the company to eliminate the risk of a massive trial verdict.
The multistate investigation began in 2016 and has sprawled across dozens of companies and hundreds of generic drug products. Prosecutors alleged that Sandoz executives communicated with competitors to coordinate price increases and allocate market share, driving up costs for consumers across the involved. The conspiracy touched some of the most commonly prescribed generics in the country, including steroid creams and a blood pressure medication, according to a separate Department of Justice criminal case against Sandoz.
Prosecutors from the state AGs' case assembled the suit from cooperating insiders, a trove of 20 million-plus documents, and phone records spanning more than 600 sales and pricing staff. Court filings describe an interconnected web of competing industry executives who met at industry dinners, "girls' nights out," lunches, cocktail parties, and golf outings, then communicated via phone calls, emails, and text messages to coordinate illegal agreements.
Defendants allegedly used terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they discouraged competition and kept prices high. One cooperator kept a two-volume diary of phone calls with rivals and internal meetings — a notebook prosecutors later seized.
"Sandoz Inc. rigged the generic drug market, forcing customers to pay higher prices for critical medication. The company then fraudulently shielded its assets to evade accountability. This settlement in principle ensures the company takes responsibility for its brazen actions and is a major step as we head to our first trial," said Connecticut Attorney General William Tong, who led the multistate coalition.
Sandoz started life inside Novartis; the Swiss parent carved out the generics arm and floated it on the Swiss stock exchange in October 2023. The case against Sandoz dates to the period when the company was still part of Novartis.
The company paid $195 million in 2020 to settle the federal criminal charges and $185 million in 2021 for the civil case, both of which are distinct from the suit by the Attorneys General. The company cast the settlements as proof it is cleaning house after old misconduct.
If the Sandoz deal wins final approval, the total state recovery would climb to approximately $469 million, according to Davenport's office. Sandoz's corporate filing puts the company's total payment at roughly $450 million, including $400 million to the 43-state coalition and an additional $50 million to states that settled earlier. The five earlier settlements — with Glenmark, Lannett, Bausch, Apotex, and Heritage — totaled roughly $96.5 million, a fraction of what Sandoz agreed to pay. The difference in settlement size underscores Sandoz's outsized role in the generic market.
The settlement is part of a broader pattern of enforcement, according to North Carolina Attorney General Jeff Jackson. "This is the sixth drug company we've held accountable for illegally raising prices, and we're not done yet."
The $400 million payment would flow to state enforcers over seven years starting in 2027. Davenport's office did not detail how or when New Jersey would receive its share.
New Jersey's Position in the Coalition
New Jersey signed on as a participating state in the coalition; the state did not serve as a lead plaintiff. Connecticut, North Carolina, Colorado, New Hampshire, California, and West Virginia spearheaded the litigation and controlled the discovery strategy.
Davenport's office described the settlement as a win for buyers who overpaid for basic prescriptions. Her announcement came a day after other coalition states released the news.
The Attorney General office did not specify how much New Jersey purchasers or state employee health plans would recover under the allocation formula, noting that state officials have not yet determined specific distributions.
"Generic drugs are supposed to provide an affordable option for consumers, but collusion by Sandoz and other companies has forced up the prices for these necessary medicines," Davenport said. "This agreement in principle with Sandoz is another effort to drive down the cost of prescription drugs, and this is not the end of our work to hold pharmaceutical companies accountable when they fix prices to boost their profits."
Michigan Attorney General Dana Nessel struck a similar note. "Michigan residents deserve access to affordable, essential medication without being taken advantage of. I am proud to have worked with a coalition that secured meaningful changes that protect consumers."
The deal remains a settlement in principle, not a signed contract. Final execution depends on signatures from all participating states and territories, followed by court approval.
Davenport's office emphasized that the agreement would resolve all remaining federal and state governmental claims against Sandoz in the United States. The company would walk away from the governmental litigation but could still face suits from people who rejected the class deal and sued on their own.
The states are gearing up for their first trial, set for Hartford, Connecticut, in late 2026. Those defendants, who include other generic manufacturers and executives, will either settle on terms shaped by the Sandoz benchmark or make their cases in front of a jury. The agreement gives state enforcers a powerful benchmark for those negotiations.
The settlement also gives state enforcers a recovery while avoiding the risk and expense of a trial. The company explicitly denied any admission of wrongdoing, a standard feature of corporate settlements that lets defendants pay without conceding liability.
Separately, Sandoz agreed to pay $28.5 million to resolve claims from a class of indirect reseller plaintiffs — retail pharmacies, clinics, hospitals, and other entities that resold medicines to consumers. A judge still needs to sign off on that deal, and anyone involved can still walk away.
New Jersey consumers who bought Sandoz generics during the conspiracy period should not expect direct refund checks. The settlement money will flow to state governments first. Davenport's office has not determined how it will spend or distribute those funds.
For New Jersey purchasers, the real test is whether any of this money finds its way back into their pockets.
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Sources
• California Attorney General, "Attorney General Bonta Announces $400 Million Settlement in Principle with Sandoz" (August 3, 2026)
• Colorado Attorney General, "Attorney General Phil Weiser Announces $400M Settlement in Principle with Sandoz" (August 3, 2026)
• Connecticut Attorney General, "Attorney General Tong Announces Settlement with Sandoz" (August 3, 2026)
• Ed Silverman, STAT News, "Sandoz to Pay $478.5M to Settle Price-Fixing Allegations in Long-Running Battle With States" (August 3, 2026)
• Michigan Attorney General, "AG Nessel Announces $400 Million Settlement in Principle with Sandoz" (August 3, 2026)
• New Hampshire Attorney General, "$400 Million Settlement in Principle with Sandoz in Generic Drug Price-Fixing Litigation" (August 3, 2026)
• New Jersey Office of the Attorney General, "Attorney General Davenport Announces $400 Million Settlement in Principle with Sandoz" (August 4, 2026)
• North Carolina Attorney General, "Attorney General Jeff Jackson Reaches $400 Million Settlement in Principle with Sandoz" (August 3, 2026)
• PharmExec, "Sandoz Agrees to $450 Million Settlement With 43 US States Over Generic Drug Antitrust Claims" (August 3, 2026)
• Reuters, "Sandoz Agrees $450M Settlement With 43 US States Over Antitrust Claims" (August 3, 2026)
• Sandoz Group AG, "Sandoz Takes Further Steps to Resolve Legacy US Generic Medicine Litigation" (August 3, 2026)
• West Virginia Attorney General, "Attorney General McCuskey Announces $400 Million Settlement in Principle with Sandoz" (August 3, 2026)