Tuesday, May 15, 2007





Drug Wholesalers, Retailers Could Not Pursue Antitrust Claims Against Wyeth-Ayerst Labs

This posting was written by Jeffrey May, editor of CCH Trade Regulation Reporter.

Pharmaceutical wholesalers and retailers that purchased Premarin, an estrogen replacement medication, directly from its manufacturer—Wyeth-Ayerst Laboratories, Inc—could not proceed with claims that Wyeth illegally maintained its dominant market share in the oral estrogen replacement therapy (ERT) market in violation of Sec. 2 of the Sherman Act, the U.S. Court of Appeals in Cincinnati has ruled. Summary judgment in favor of Wyeth was affirmed.

Link Between Actions, Antitrust Injury

The wholesalers and retailers failed to provide sufficient evidence to create a genuine issue of material fact as to the causal connection between the drug maker's challenged actions and their antitrust injury—that is, increased prices for Premarin.

Wyeth developed the "Premarin Preemptive Plan" after Duramed Pharmaceuticals, Inc. won Food and Drug Administration (FDA) approval for Cenestin—the second branded ERT drug on the market. ERT drugs are prescribed to treat women who have undergone hysterectomies and whose bodies no longer produce estrogen.

The wholesalers and retailers alleged that, under its "Premarin Preemptive Plan," Wyeth attempted to limit the alternative ERT drug's distribution through the use of restrictive contractual arrangements with managed care organizations (MCOs) and pharmacy benefit managers (PBMs). Then, the defending drug maker allegedly adopted price increases as a result of its successful campaign to limit the alternative ERT drug's market share.

The wholesalers and retailers failed to provide a causal link between Wyeth's contractual agreements with PBMs and MCOs and increased prices for Premarin, the court held.

Evidence

Such a link was not demonstrated by the purchasers' four pieces of evidence:

the defending drug maker's documents concerning its pricing practices;

the purchasers' expert testimony;

a Congressional Budget Office study that the purchasers claimed supported the view that increased competitor market share imposed price restraint in the pharmaceutical market; and

purported "concessions" by the defending drug maker's expert witnesses.

The decision is JBDL Corp. v. Wyeth-Ayerst Labs, Nos. 05-3860/3988, filed May 10, 2007. Text of the decision will appear at CCH Trade Regulation Reports ¶75,694

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