Tuesday, August 02, 2011

Medical Patent Licensee Could Have Violated Antitrust Laws

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

A Florida hospital sufficiently alleged that the exclusive licensee of two patents involving the administration of adenosine to patients undergoing cardiac stress tests engaged in tying, exclusive dealing, and attempted monopolization, the federal district court in Tampa has ruled. Adenosine is a naturally-occurring compound that induces the dilation of blood vessels. A motion to dismiss was denied.

After disposing of a challenge to the hospital’s standing, the court rejected the defendant’s argument that the tying claims should be dismissed for failure to allege plausible relevant markets, two separate and distinct product markets, or anticompetitive
effects in the tied product market.

A further contention that the exclusive dealing allegations were “simply a re-packaging of its defective tying theory” was unavailing, given that the tying claims were not found to be defective with respect to their relevant market description or under a rule of reason analysis.

Attempted Monopolization

The hospital’s assertion that the licensee engaged in attempted monopolization prohibited by federal or state antitrust law was well supported by the charge that the licensee charged customers 450 percent more for its adenosine than customers would pay for adenosine from alternative providers.

The complaining hospital sufficiently alleged that the defendant was able to control the cost for adenosine and was able to foreclose competitors from customers of adenosine, the court added.

In addition, the hospital submitted factual allegations that the licensee possessed a dangerous probability of successfully attaining and retaining monopoly power in the relevant market.

There was an alleged perception in the health care community that use of the process patent for administering adenosine was the medically accepted standard of care, which created barriers to entry.

Further, the licensee allegedly used threats and misleading communications regarding its process patent and extended the patent to its branded product.

The July 25 decision is Lakeland Regional Medical Center, Inc. v. Astellas US LLC, 2011-2 Trade Cases ¶ 77,544.

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