In re DDAVP Antitrust Litigation
33 states investigated “pay for delay” allegations relating to DDAVP, a drug used to alleviate bed-wetting. States alleged that Aventis, holder of the patent for the medication, engaged in a scheme to delay the regulatory approval and sale of a generic version of DDAVP, in violation of state and federal antitrust law. States and defendants entered into a settlement under which states received $3.45 million, not as a civil penalty and defendants did not admit guilt.
In re GE Funding Capital Market Services, Inc. (Municipal Bond Derivatives)
Starting in 2008, the states investigated the municipal bond derivatives market, where tax exempt entities like governments and nonprofit organizations issue bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk on bonds. GE Funding is the fifth financial institution to settle with the multistate working group in the ongoing municipal bond derivatives investigation following Bank of America, UBS AG, JP Morgan and Wachovia.
The investigation revealed conspiratorial and fraudulent conduct involving individuals at financial institutions and certain brokers with whom they had working relationships. The states’ investigation developed evidence that certain traders at GE Funding, in concert with certain brokers, engaged in conduct that allowed the broker to determine in advance that GE Funding would win a bid for a guaranteed investment contract. The conduct allowed GE Funding to submit a “last look’’ bid, while the broker arranged for other financial institutions to submit purposely non-winning courtesy bids. Because of the “last look,” on many occasions GE Funding was able to lower its bid to the issuer and still win the transaction.The misconduct led state and local entities, such as municipalities, counties, school districts and other government agencies, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise.
In re J.P. Morgan Chase (Municipal Bond Derivatives)
Starting in 2008, the states investigated the municipal bond derivatives market, where tax exempt entities like governments and nonprofit organizations issue bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk on bonds.
The investigation revealed conspiratorial and fraudulent conduct involving individuals at JPMC, other financial institutions, and certain brokers with whom they had working relationships. The states alleged that certain JPMC employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led state and local entities, such as municipalities, counties, school districts and other government agencies, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. The $66.5 million multistate settlement is one component of a coordinated settlements (totaling $92 million) between JPMC and the U.S. Department of Justice’s Antitrust Division, the Securities and Exchange Commission (SEC), the Internal Revenue Service, the Office of the Comptroller of the Currency (OCC), as well as the states.
IN the matter of Wachovia
Wachovia and its successor, Wells Fargo, settled charges by 25 states and several federal agencies (the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency (OCC), the Internal Revenue Service (IRS) and the Federal Reserve) that it participated in a nationwide scheme to allegedly rig bids and engage in other anticompetitive conduct relating to municipal bond derivatives that defrauded state agencies, local governmental entities and not-for-profit entities. The multistate settlement is part of a $148 million settlement Bank of America entered into simultaneously with the federal agencies.
State of Nevada v. Universal Health Services, Inc., Alan B. Miller, and Psychiatric Solutions, Inc., No. 2:10-cv-01984 (D.Nev. 2010)
Sate and FTC reached settlement requiring divestitures of several acute-care inpatient psychiatric hospitals in the Las Vegas area.
Texas et al. v. Organon (Remeron), No. 04-5126 (D.N.J. 2004)
Plaintiff states settled with drug maker Organon USA, Inc. and its parent company, Akzo Nobel N.V., resolving antitrust claims involving the antidepressant drug Remeron between June 2001 and October 2004. The states’ complaint alleged that Organon unlawfully extended its monopoly by improperly listing a new “combination therapy” patent with the U.S. Federal Drug Administration. In addition, the complaint alleged that Organon delayed listing the patent with the FDA in another effort to delay the availability of lower-cost generic substitutes. The $26 million settlement resolved claims brought by state attorneys general, as well as a private class action brought on behalf of a class of end payors. Organon also agreed to make timely listings of patents and to submit accurate and truthful information to the FDA.
United States et al. v. Ticketmaster, No. 1:10-cv-00139(D.D.C. 2010)
U.S. and 17 states sued to enjoin merger of Ticketmaster, the nation’s largest ticketing services company, and Live Nation, the nation’s largest concert promoter.
According to the Complaint, the parties announced their merger shortly after Live Nation had entered the concert ticketing business as Ticketmaster’s closest competitor. The complaint alleged that consumers and major concert venues would
face higher ticket service charges as a result of the merger
The settlement requires the merging parties to license its ticketing software to Anschutz Entertainment Group (AEG). AEG is the nation’s second largest promoter and the operator of some of the largest concert venues in the country. The merging parties are further required to divest Ticketmaster’s entire Paciolan business, which provides a venue-managed platform for selling tickets through the venue’s own web site. Paciolan is to be divested to Comcast/Spectacor, a sports and entertainment company with a management relationship with a number of concert venues. Comcast also has ticketing experience through its New Era ticketing company.The settlement also prohibits the merging parties from retaliating against venue owners who contract with the merging parties’ competitors.
Richardson v. Akzo Nobel (In re Vitamins Antitrust Litigation), 1:09-cv-02112-TFH(D.D.C. 2009)
As part of a private class action lawsuit, states, as parens patriae for their citizens, reached a settlement with vitamin manufacturers accused of fixing prices on certain vitamins (The vitamins affected by this alleged price fixing conspiracy are: vitamin A,
astaxanthin, vitamin B1 (thiamin), vitamin B2 (riboflavin), vitamin B3 (niacin), vitamin B4 (choline chloride), vitamin B5 (calpan), vitamin B6, vitamin B9 (folic acid), vitamin B12 (cyanocobalamine pharma), betacarotene, vitamin C, canthaxanthin, vitamin E, and vitamin H (biotin), as well as all blends and forms of these vitamins) sold purchased between 1988 and 2000. This case is related to the case New York et al. v. Hoffmann-LaRoche, Inc.,et al. with different defendants.
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.
Florida et al. v. Abbott Laboratories et al., No. 1:08-cv-00155-SLR (D.Del. 2007)
States alleged Abbott Laboratories; Fournier
Industrie Et Sante and Laboratoires Fournier, S.A., blocked competition from less expensive
generics by continuously making minor changes in the formulations of TriCor to prevent therapeutically equivalent generic substitutions. The states alleged that the product switches helped thwart generic competition, allowing the companies to charge monopoly prices for TriCor.
The lawsuit also allegd the companies used patents, which they obtained by deceiving the Patent and Trademark Office and improperly enforced and brought a series of patent infringement lawsuits against two generic companies. According to the complaint, Abbott and Fournier filed at least ten lawsuits against two generic companies who were attempting to obtain FDA approval for their generic versions of TriCor. Abbott and Fournier eventually lost or dismissed all of the lawsuits. As a result of the product switches and patent litigation, Abbott and Fournier have successfully thwarted generic competition and denied consumers and state agencies the choice of a lower priced therapeutically equivalent generic.
The states settled their claims for $22.5 milion, which covered governmental purchases, as well as injunctive relief to prevent “product hopping” by the defendants in the future.
