Connecticut v. K&S Aktiongesellschaft (Ct.Super.Ct. Oct. 13, 2009)
In state action parallel to FTC action, Connecticut settled with parties to a merger of salt producers who had both had contracts with the state DOT for road deicing. Road deicing assets were divested to a regional company in order to preserve competition for Connecticut road de-icing contracts. The merging parties were required to provide up to 120,000 tons of de-icing salt for three years.
New York by Cuomo v. Intel Corporation, No. 09-827(JJF) (D. Del. Nov. 4, 2009)
State of New York filed a federal antitrust suit against Intel Corporation charging that Intel engaged in a worldwide, systematic campaign of illegal conduct – revealed in e-mails – in order to maintain its monopoly power and prices in the market for microprocessors. The complaint alleged that over the last several years, Intel has extracted exclusive agreements from large computer makers in which they agreed to use Intel’s microprocessors in exchange for payments totaling billions of dollars. Intel also threatened to and did in fact punish computer makers that they perceived to be working too closely with Intel’s competitors. Retaliatory threats included cutting off payments the computer maker was receiving from Intel, directly funding a computer maker’s competitors, and ending joint development ventures. According to the complaint, to obtain exclusive agreements, Intel paid hundreds of millions of dollars annually in so-called “rebates†to individual computer makers. These rebates were actually just payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature. Sometimes, the payments from Intel exceeded a company’s reported quarterly net income. Intel’s pressure on computer makers to guarantee it specified market shares of their sales prevented computer makers from responding to consumer demand. The state sought to bar further anticompetitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties. Intel’s various motions to dismiss were granted, greatly reducing the scope of the state’s case. The parties settled in 2012. New York dismissed the action with prejudice and agreed to terminate its investigation. Intel did not admit wrongdoing and did not change its business practices, but agreed to pay $6.7 million in costs.
Nevada by Masto, v. Service Corporation International, No. 2:09-cv-02248. (D.Nev. 2009)
SCI sought to acquire the assets of Palm Mortuary, a cemetery company in Las Vegas, Nevada. After state and FTC investigation, determined that the acquisition would have created a combined company controlling 76% of the cemetery market in the Las Vegas area, the state and FTC filed a complaint and settlement. SCI agreed to divest most of its assets in the Las Vegas area in order to proceed with the acquisition. The complaint alleged that the acquisition, as planned, would eliminate direct competition between SCI and Palm Mortuary for cemetery services in the Las Vegas area. This would leave area cemetery consumers with fewer choices, along with the prospect of higher prices or reduced levels of service. The complaint also alleged that entry into this market from new cemetery providers would not be timely, likely or sufficient to prevent these anticompetitive effects. The settlement provides that SCI must sell its Davis Funeral Home and Memorial Park property as well as the pre-paid business derived from this property and another SCI-owned Davis funeral home to a buyer approved by the Attorney General within 90 days of SCI acquiring Palm Mortuary. Prior to SCI selling these Davis assets, SCI must ensure the economic and competitive viability of these Davis assets in accordance with past practices. A series of firewall protections help accomplish this. The Attorney General’s staff will monitor SCI’s compliance and can name an independent third party to monitor the company’s compliance. For the next three years, SCI will provide notice to the Attorney General of future acquisitions that involve cemetery service or funeral service markets where the company already has a presence in Nevada. Additionally, SCI reimbursed the Office of the Attorney General for its attorneys’ fees and costs resulting from the investigation, as well as any potential future investigations. SCI is subject to fines and injunctive relief for non-compliance.
FTC and California ex rel. Brown v. Watson Pharmaceuticals No. CV-09-00598 (C.D. Cal Feb. 12, 2009)
Plaintiff State and the FTC challenged so-called “reverse payment” agreement between Solvay Pharmaceuticals (patent holder) and Watson Pharmaceuticals, Par Pharmaceuticals and Paddock Laboratories that delayed the entry of a generic substitute for Androgel, a testosterone-replacement drug. State and the FTC alleged that Solvay, fearing the entry of lower-cost generic substitutes for Androgel, resolved patent litigation with the other three companies by making substantial payments to them, on the condition that they not enter the market with their generic version. the parties seek injunctive relief and fines of $2500 per violation under California antitrust law. Case was transferred to district court in Georgia and state did not re-file in Georgia, although the FTC did.
Minnesota v. Ovation Pharmaceuticals, Inc. 08 cv 6381, D.Minn.
Minnesota and the FTC filed companion cases in federal court, alleging that Ovation monopolized the market for drugs to treat PDA, a heart ailment in newborns. The complaint alleged that Ovation acquired the rights to the only two drugs used to treat PDA. Patents were expiring on the first drug, Indocin, when Ovation purchased the second drug approved for treatment of PDA. Upon making this purchase, Ovation raised the price of both drugs from $36 per vial to $500 per vial. The purchase of the rights to Indocin was below the HSR reporting threshhold.
Connecticut v. Connecticut Chiropractic Ass’n et al. (Conn. Super. Ct. Hartford March 25, 2008)
State alleged that members of both trade groups, spurred on by their leadership,
illegally agreed to boycott Anthem Health Plans, Inc.’s intention to form a new network for chiropractic services that would be administered by American Specialty Health Networks, Inc. (ASH). Hirtle (longtime counsel to CCA) facilitated the conspiracy by aggressively urging chiropractors to opt out
of the proposed network. Chiropractors feared that the ASH contract would lower reimbursement rates for chiropractic services. The state alleged that the illegal boycott improperly influenced the rates paid to
chiropractors; raised chiropractic costs for Anthem; and deprived Anthem, ASH
and consumers of the benefits of competition among chiropractors. Under the settlements, the CCA, CCC and Hirtle have agreed to pay civil penalties to the state, as well as adopt several measures to prevent future anticompetitive practices.
State of Colorado et al v. Warner Chilcott, 1:05-cv-02182 (D.D.C.2005)
34 states filed suit alleging that Warner Chilcott entered into an illegal agreement with Barr Pharmaceuticals to raise the prices of Ovcon, an oral contraceptive. The lawsuit alleged that after Barr Pharmaceuticals publicly announced that it planned to have a generic version of Ovcon on the market by the end of the year, Warner Chilcott paid Barr Pharmaceuticals $1 million for an agreement designed to prevent Barr’s generic product from coming to market. Under the terms of the alleged agreement, once Barr received FDA approval to market generic Ovcon, Warner Chilcott had 90 days to pay Barr $19 million, after which Barr would refuse to bring the cheaper generic version to the market. The lawsuit alleged that as a result of the agreement, Warner Chilcott paid Barr a total of $20 million to keep it from marketing its generic version of Ovcon. In additon to a payment of $5.5 million, the settlement prohibits Warner Chilcott, for ten years, from entering into any agreement that would have the effect of limiting the research, development, manufacture, or sale of a generic alternative to one of its drugs. Furthermore, Warner Chilcott must provide the states notice of certain agreements it has entered into with generic manufacturers, and must continue to make its records available to the states for inspection to determine whether the company is complying with the terms of the agreement.
Pennsylvania v. University of Pittsburgh Medical Center (W.D. Pa)
State entered into a consent decree with University of Pittsburgh Medical Center to remedy anticompetitive concerns with acquisition of Mercy Medical Systems in Western Pennsylvania.
Maryland v. Rite-Aid Corp.
Rite Aid sought to acquire the assets of Canadian company Jean Coutu, which owned the Eckerd and Brooks retail pharmacy chains. Parties agreed to divest 26 stores in seven states.
Florida v. Columbia/HCA Healthcare Corporation, Healthtrust, Inc., Memorial Health Systems, Inc. and Halifax Hospital Medical Center
As part of a negotiated settlement, the State of Florida and the Federal Trade Commission (FTC) sought to enjoin the merger of defendant hospital facilities, alleging that such acquisitions would result in a substantial reduction of competition in the marketplace for medical care.
