Former Sandoz Executive Pleads Guilty in U.S. Price-Fixing Probe
Former Sandoz Executive Pleads Guilty in U.S. Price-Fixing Probe
(Bloomberg) -- A former senior executive at Novartis AG generics unit Sandoz pleaded guilty on Friday for conspiring to fix prices of generic drugs, the latest in a long-running U.S. criminal antitrust probe.
Hector Armando Kellum, who was responsible for overseeing generic-drug prices and contracts at Sandoz, a New Jersey-based generic and biosimilar company run by the Swiss pharmaceutical giant, pleaded guilty to conspiring with other drug executives to fix prices from 2013 to 2015, the U.S. Justice Department said in a news release on Friday.
Kellum allegedly conspired to set prices and rig bids for off-patent drugs with former Taro Pharmaceutical Industries Ltd. marketing executive Ara Aprahamian, who was indicted in the probe earlier this month, the Justice Department said.
“With today’s guilty plea, the Antitrust Division continues its prosecution of high-ranking executives who conspired to cheat America’s most vulnerable elderly consumers by raising prices for vital drugs,” said Makan Delrahim, the head of the division, in a statement.
Kellum is the fourth executive to be charged and the third to plead guilty in an investigation that began more than five years ago and has scrutinized the alleged behavior of executives at some of the world’s largest generic-drug makers, including Mylan NV and Teva Pharmaceutical Industries Ltd. Two smaller manufacturers, Heritage Pharmaceuticals Inc. and Rising Pharmaceuticals Inc., settled Justice Department charges with what’s known as a deferred prosecution agreement last year.
Catherine Redlich, a lawyer representing Kellum, declined to comment.
The conduct described in the plea agreement was “in direct contravention of our company’s values and the clear policies and trainings we had in place at the time,” said Novartis spokeswoman Jamie Bennett. “We are continuing to cooperate with the government in its investigation.”
A handful of generic drugmakers have held talks with the U.S. Justice Department about resolving the probe.
In a separate lawsuit filed by state attorneys general led by Connecticut, Kellum is alleged to have communicated with executives at Mylan, Teva and other companies about substantial price increases on a number of products.
To contact the reporters on this story: Riley Griffin in New York at rgriffin42@bloomberg.net;David McLaughlin in Washington at dmclaughlin9@bloomberg.net
To contact the editor responsible for this story: Timothy Annett at tannett@bloomberg.net
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