Case Description
State sought damages and permanent injunctive relief, alleging that Abbott, Bristol-Myers, Ross, and AAP conspired to fix the prices and monopolize the industry for infant formula. The complaint further alleged that the defendant companies created barriers to entry into the infant formula industry through their ‘traditional marketing’ practices of persuading hospitals and physicians to endorse their infant formula products to patients in exchange for free products, research grants and other benefits. Parents who received free samples had the wrong impression that the physicians were prescribing specific formula to them, thus discouraging price comparison shopping by consumers and limiting effective competition by other manufacturers. The Defendant companies agreed to settlement terms. The Defendant companies agreed to a permanent injunction, monetary payment of $250,000 in costs and attorneys’ fees and $1 million worth of free products, distributed cy pres through the Texas Department of Health.
