Lawsuit Alleges Bausch Health and Salix Pharmaceuticals Delayed Generic Competition for Drug Used to Treat IBS-D and Hepatic Encephalopathy
PROVIDENCE, R.I. — DiCello Levitt LLP and co-counsel have filed a proposed class action on behalf of the City of Baltimore against Bausch Health Companies Inc. and its Salix Pharmaceuticals subsidiaries. The lawsuit alleges that the drugmakers engaged in a years-long anticompetitive scheme to delay lower-cost generic versions of Xifaxan and cause purchasers to pay artificially inflated prices.
The proposed class action seeks relief on behalf of Baltimore and similarly situated third-party payors that allegedly paid more for Xifaxan because of delayed generic competition.
Baltimore provides health benefits to eligible employees, retirees, and their beneficiaries through self-insured prescription drug coverage. According to the complaint, the City purchased substantial amounts of Xifaxan for its members and beneficiaries and paid more for the drug than it would have if lower-cost generic alternatives had been available.
Xifaxan, whose active ingredient is rifaximin, is an antibiotic. The 550 mg formulation is approved to treat irritable bowel syndrome with diarrhea, or IBS-D, and to reduce the risk of recurrence of hepatic encephalopathy, a serious brain condition that can occur in people with advanced liver disease. According to the complaint, U.S. sales of Xifaxan exceeded $2.2 billion in 2025.
“Bausch has built a multibillion-dollar business around Xifaxan while, as we allege, exploiting regulations surrounding generic drug approval to keep lower-cost generic competition out of the market,” said Partner Greg Asciolla, Chair of DiCello Levitt’s Antitrust and Competition Litigation Practice. “The result is that health plans and other purchasers have paid substantially more for this drug than they should have. We intend to hold Bausch accountable and recover those overcharges for Baltimore and other affected payors.”
Antitrust Lawsuit Alleges Years-Long Effort to Delay Generic Xifaxan
The complaint alleges that Bausch used a years-long strategy to delay lower-cost generic versions of Xifaxan and preserve its monopoly over the drug.
More than a dozen generic manufacturers have sought FDA approval to market generic Xifaxan, according to the lawsuit. The City alleges that widespread generic competition would already have occurred absent Bausch’s conduct, significantly reducing prices for purchasers.
The complaint also challenges Bausch’s 2018 agreement with Teva, which allows Teva to launch a generic version of Xifaxan in January 2028. The City alleges that the agreement, along with other patent and regulatory tactics, helped prevent Teva and other generic manufacturers from entering the market sooner.
Baltimore and the proposed class allege that they have paid higher prices for Xifaxan as a result.
The lawsuit asserts federal and state antitrust claims, along with claims under state consumer protection laws. It seeks damages for alleged overcharges, including treble damages where available, as well as declaratory and injunctive relief.
The case is Mayor and City Council of Baltimore v. Bausch Health Companies Inc., Salix Pharmaceuticals, Ltd., and Salix Pharmaceuticals, Inc., Case No. 1:26-cv-00667, filed in the U.S. District Court for the District of Rhode Island. A copy of the complaint is available here.
DiCello Levitt Partners Adam J. Levitt, Greg Asciolla, Jonathan Crevier, Daniel R. Ferri, Steven L. Groopman, and Geralyn Trujillo represent the City of Baltimore and the proposed class.
Co-counsel include Hilliard Shadowen LLP; Cohen Milstein Sellers & Toll LLP; Taus, Cebulash & Landau LLP; and the Law Offices of Peter N. Wasylyk.
About DiCello Levitt
DiCello Levitt LLP is one of the leading plaintiffs’ law firms in the United States. Nationally recognized for our work in high-stakes class actions, mass torts, and complex litigation, we have recovered more than $25 billion for clients, including individuals, businesses, and communities. We take on some of the world’s most powerful interests, pursuing justice that reshapes industries and improves lives.
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