DALLAS— Southwest Airlines (WN) has filed a federal lawsuit accusing multiple pharmaceutical companies of a long-running price-fixing conspiracy that inflated drug costs. The airline claims it overpaid significantly for employee medications due to collusion among generic drugmakers.
Filed in the Eastern District of Pennsylvania, the lawsuit names companies including Sandoz, Teva, and Sun, and follows similar legal action by other major employers. Southwest, which self-funds employee health benefits, alleges that unlawful coordination drove up generic drug prices nationwide, Reuters reported.
Photo: Tim | FlickrSouthwest Lawsuit Against Drugmakers
Southwest Airlines (WN), headquartered in Dallas, claims that drugmakers colluded to raise the prices of hundreds of generic medications starting in May 2009.
The complaint, unsealed on July 3 in Philadelphia (PHL), alleges that companies including Sandoz (Switzerland), Teva (Israel), and Sun (India) coordinated directly on pricing, market entries, and exits—actions the airline says violated U.S. antitrust laws.
According to the complaint, Southwest funded all employee and retiree health expenses from corporate assets, making it directly responsible for paying inflated drug prices.
The airline cited evidence of systematic communication between the companies to manipulate bids and stabilize prices at artificially high levels.
This case aligns with broader litigation pursued by state attorneys general and other corporations. A multistate antitrust case is already underway in Connecticut federal court, and class-action suits from wholesalers are pending in Philadelphia.
Previous settlements include a $275 million payment by Sandoz in February to resolve similar claims and a $50 million payout by Apotex and Heritage Pharmaceuticals.
Major employers like General Motors, Target, and American Airlines have also sued many of the same drugmakers, alleging billions in overcharges. These suits collectively underscore the mounting scrutiny generic drug companies face over pricing practices.
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Photo: Aero Icarus | FlickrSouthwest’s Financial Exposure
Southwest’s lawsuit asserts that its direct payment model left it uniquely exposed to overcharges, as it does not rely on third-party insurance providers.
The company alleges that its payments were significantly inflated due to unlawful price coordination across the generic pharmaceutical market.
The case, filed under docket number 2:25-cv-02951-CMR, is titled Southwest Airlines Co v. Actavis Holdco U.S. Inc et al. The airline seeks to recover damages linked to alleged antitrust violations over a multi-year period affecting the cost of employee medications.
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