Southwest Airlines accuses drugmakers of price-fixing conspiracy in new lawsuit

Southwest Airlines LUV has sued a group of drugmakers in U.S. court for allegedly participating in a price-fixing conspiracy that caused the airline to overpay for purchases of hundreds of millions of dollars in medications for employees.

Southwest alleged it was overcharged by generic drugmakers including Sandoz, Teva and Sun starting in May 2009. The lawsuit, filed in the federal court in Philadelphia and unsealed on July 3, said the companies violated antitrust law by coordinating on pricing.

Sandoz, Teva and Sun did not immediately respond to requests for comment.

Southwest in a statement said it sued after discovering evidence of what it called a widespread price-fixing conspiracy among dozens of generic drug makers.

State attorneys general and other plaintiffs are pursuing related antitrust allegations against generic drugmakers in federal court in Connecticut. Related class actions from drug wholesalers and others are pending in the Philadelphia court.

Generic drugmakers Apotex and Heritage Pharmaceuticals last year agreed to pay nearly $50 million to settle claims by Connecticut and other states that accused them of conspiring to artificially inflate prices.

Switzerland-based Sandoz in February agreed to pay $275 million to resolve claims by U.S. consumers and others who had accused the company of conspiring to fix prices.

Southwest paid health claims for its employees and retirees from its corporate assets and did not otherwise rely on third-party insurance. The airline's lawsuit said it paid “massive” unspecified overcharges for generic medications.

The complaint said generic drugmakers were “systematically and routinely communicating with each other directly about bids, pricing, and market entries and exits for hundreds of generic drugs.”

Other employers — including General Motors, Target and American Airlines — had sued the same defendants last year, claiming billions of dollars in overcharges.

The case is Southwest Airlines Co v. Actavis Holdco U.S. Inc et al, U.S. District Court for the Eastern District of Pennsylvania, No. 2:25-cv-02951-CMR.

For plaintiffs: Karma Giulianelli and Sundeep Addy of Bartlit Beck

For defendants: No appearances yet

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