Texas v. Henry Schein, Inc., No. D-1-GN-17-003749, (Travis.Cty. Dist. Ct., 261st Judicial Dist. Aug. 3, 2017)
Plaintiff state reached a settlement with dental supply company concerning an illegal group boycott in the dental supply market. The settlement prohibits Henry Schein Dental from engaging in similar unlawful conduct. Texas settled a similar suit with Benco Dental Supply Company in 2015. The state’s antitrust action stemmed from a three-year investigation into allegations that Schein and two of its competitors worked together to thwart the entry of a lower-cost, online source of dental supplies provided by the Texas Dental Association (TDA). The state alleged that Schein and others colluded to discourage distributors and manufacturers from working with the TDA and its business partner, and agreed not to attend the TDA’s annual trade show in 2014.Under the settlement, Henry Schein Dental is prohibited from participating in anticompetitive activities in the future and must institute additional antitrust training for the company. Schein will pay $300,000 to reimburse the state for investigative costs and attorneys’ fees.
In the Matter of the Investigation of Compulink Technologies, Inc.Assurance No. 17-137 (July 28, 2017)
Defendants are providers of GovDelivery, a cloud-based digital communications solution. New York State government entities issued RFPs seeking bids for GovDelivery solutions. Compulink submitted bids. In order to provide the necessary number of bids for the procurement process in New York, Compulink arranged for Milenio, run by the wife of Compulink’s owner, and another bidder to submit bids at a higher price than Compulink’s. Compulink was awarded contracts as a result fo these sham bids. Although the bids were rigged, the investigation determined that the sham bids were submitted to satisfy the requirements for an expedited procurement process, rather than to secure higher prices. The parties agreed not to communicate with others concerning bids, not to hold themselves out as separate entities, and allow the AG to monitor their future conduct. They also paid $75,000 in civil penalties..Denise Arboleda, President of Milenio Technology, also pled guilty to failure to obey the command of a subpoena.
State of California ex rel. Becerra v. Watson Laboratories, Inc., No. 17-cv-00562 (N.D. Cal. Feb. 3, 2017)
Plaintiff state filed complaint alleging violations of the Sherman Act and California’s Cartwright Act. the complaint alleged an anticompetitive pay-for-delay agreement with respect to the Lidoderm pain relief patch. According to the complaint, Watson Pharmaceuticals Inc. colluded with its competitors and fixed the price of the generic version of the drug.
Watson, which subsequently was acquired by Teva Pharmaceutical Industries Ltd., allegedly agreed to settle a patent infringement suit with its competitor Endo Pharmaceuticals Inc., which was the only producer of the name-brand pain relief patch. Pursuant to the agreement, Endo agreed to allow Watson to sell branded Lidoderm at no cost, if Watson agreed to hold off on its release of a generic version of the drug. Then, when Watson released its generic version, Endo did not release its own generic version for nearly eight months, the suit claims.
According to the complaint, “The threat of generic entry to Lidoderm posed significant financial risks for the company,†and “Endo knew that generic competition would decimate its Lidoderm sales and that any delay in generic competition would be highly profitable for Endo, but very costly for consumers.â€
California settled with Endo for a $760,000 payment (not characterized as attorneys’ fees or civil penalties) and an eight-year injunction preventing future pay-for-delay conduct.
Alaska v. Crowley Marine Services et al., No. 3AN-04-100 Civil. (Alaska Superior Court, 2005)
Alaska initiated an investigation of the merger between two companies providing barge-delivered petroleum products to western Alaska. A consent decree was reached between the parties that requires significant divestiture of vessels, storage facilities, and property to a qualified buyer approved by the state. The consent decreed was filed for approval in the Alaska Superior Court, and was approved in September, 2005 after a hearing to consider strong opposition from fuel customers in western Alaska.
FTC and Plaintiff States v. Mallilnckrodt Ard Inc. (formerly Questcor), No. 1:17-cv-00120 (D.D.C. Jan. 18, 2017)
Four states and the FTC reached a $100 million settlement with Mallinckrodt plc and its US subsidiary, formerly known as Questcor Pharmaceuticals, Inc. resolving a lawsuit accusing Questcor of monopolizing the market for Achthar, the only adrenocorticotropic hormone (ACTH) based therapeutic drug sold in the United States. ACTH is used as a last resort to treat infantile spasms and multiple sclerosis. Questcor allegedly blocked competition for Acthar by disrupting the bidding process and acquiring the U.S. rights for Synacthen Depot, the only other ACTH based drug sold in the world. In 2001, Questcor bought the rights to Acthar and increased the price of it by 85,000 percent, charging over $34,000 for a vial of the drug that used to cost $40 per vial. In 2012, Novartis Pharma A.G sold the U.S. rights of Synacthen, Achthar’s only competitor. The complaint alleges that three other companies had all conducted due diligence and submitted formal offers for Synacthen with plans to develop and launch Synacthen in the United States in direct competition with Questcor. However, perceiving the threat to its U.S. monopoly if a rival drug company purchased the assets, Questcor stepped in to outbid the three other companies, offering Novartis $135 million in guaranteed payments with only vague plans for Synacthen and after very limited due diligence. Through the acquisition, Questcor sought to extinguish the most likely challenges to its Acthar monopoly. According to the complaint, this allowed Questcor to continue charging over $34,000 per vial for H.P. Acthar Gel. In addition to paying $100 million in disgorgement, Under the settlement, Mallinckrodt will pay $100 million. The company will also be required to license a competitor to the rights it acquired from Novartis to commercialize and develop Synacthen in the United States, including the Synacthen trademark, along with clinical trial data and certain intellectual property related to manufacturing and formulation. Mallinckrodt is also prohibited from taking actions that would interfere with clinical trials or clinical plans for Synacthen.
State of California v. T.Rad Co. Ltd., No. 2:16-cv-13199 (E.D. Mich. Sept. 6, 2016)
California filed a complaint and settled with T.Rad Co, a maker of automobile radiators and automatic transmission fluid warmers, alleging that the company rigged bids and fixed the prices of its parts from at least 2002 to 2010. California received $162,500 in damages and attorneys fees and Florida received $81,250.T.RAD agreed to cooperate with the states by providing documents and information related to the investigations into the price fixing conspiracy.
In the Matter of NFL Ticketing Investigation, Assurance No. 16-181(NY Attorney General Antitrust Bureau (Nov. 15, 2016)
Plaintiff states entered into a settlement agreement with the National Football League under which the NFL would discontinue its league-wide mandatory price floor (no tickets could be sold on the NFL secondary market platform for a price less than a season ticket holder’s price) and would not direct or require ticketing practices designed to preclude fans from using competing ticket exchanges.
California v. Panasonic Corporation, No. 2:16-cv-14117 (E.D. Mich. Nov. 21, 2016)
California sued Panasonic Corp. and its U.S. arm in Michigan federal court, alleging that the electronics company conspired to fix prices of switches and other car parts. The state alleged that from at least July 1998 to February 2010, the electronics company conspired with other companies to fix prices for various switches in vehicles, high-intensity-discharge lamp ballasts and steering angle censors, resulting in increased costs for state agencies purchasing cars and parts, along with increased costs for the state�s consumers. The complaint charged the companies with violations of both federal and California antitrust laws, unfair competition and unjust enrichment, and alleged that the deadweight losses to the economy of the state, including reduced output, higher prices and reduction in consumer welfare. The complaint was filed to effectuate a settlement between California and Florida and Panasonic that had been reached in 2015. California received $350,000 and Florida received $187,500 and Panasonic provided the states with all documents and information from the investigations by USDOJ, the EU and Japan and documents provided to class counsel in the multidistrict litigation.
New York et al. v. Cephalon, No. 2:16-cv-04234 (E.D. Pa. Aug. 4, 2016)
In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
Massachusetts et al. v. Koninklijke Ahold N.V., No. 1:16-cv-01412 (D.D.C., July 25, 2016)
Plaintiff states and FTC filed suit challenging the merger of Ahold and Delhaize, supermarket chains operating in the United States as Stop & Shop and Hannafords. According to the complaint, supermarkets operated by Ahold and Delhaize compete closely for shoppers based on price, format, service, product offerings, promotional activity, and location. Without a remedy, the merger would eliminate direct supermarket competition to the detriment of consumers in these local markets. As a result, the merger would increase the likelihood that the combined company could unilaterally exercise market power, and that the remaining competitors could coordinate their behavior to raise prices. the parties agreed to divest 76 supermarkets in the plaintiff states. The settlement also required prior notification of future supermarket purchases and $300,000 in attorneys fees and costs.
