In two recent cases the courts dismissed antitrust claims filed against medical device manufacturers that were based on allegations that the manufacturers dealt with customers in a way that improperly excluded competition. In each case a key reason for the dismissal was lack of evidence that customers were prevented from purchasing from the defendant's competitors.

In St Francis Medical Centre v CR Bard Inc(1) the US District Court for the Eastern District of Missouri awarded summary judgment to Bard in a case challenging, among other things, Bard's contracts with group purchasing organizations. Group purchasing organizations act as purchasing intermediaries by negotiating contracts for the purchase of medical supplies by member hospitals. The plaintiff hospitals had alleged that Bard's contracts with group purchasing organizations allowed it to control the market for catheters by preventing competitors from selling to hospitals that purchase through the group purchasing organizations.

In dismissing the claims the court noted, among other things, that Bard's agreements with group purchasing organizations could not have excluded competition because the hospital/group purchasing organization contracts did not bind the hospitals to purchase through the group purchasing organizations. Although some group purchasing organizations had sole source relationships with Bard for catheters, officers of member hospitals had testified that they purchased from other catheter suppliers where it was preferable due to price or other reasons. The court also noted that the exclusive agreements with group purchasing organizations could be terminated upon either 60 or 90 days' notice. The court similarly found that Bard's use of rebates or incentives did not harm competition due, among other things, to a lack of evidence that these payments affected the purchasing decisions of any specific customer.

In Synergetics USA v Alcon Labs(2) the US District Court for the Southern District of New York dismissed antitrust claims brought against Alcon challenging Alcon's alleged use of bundled discounts. Alcon sells, among other things, vitrectomy machines used by eye surgeons and the disposable cassettes used in those machines, as well as light pipes that deliver light to the eye during eye surgery. Synergetics sells, among other things, competing light pipes. Synergetics alleged that Alcon tied the sale of its light pipes to the sale of cassettes, so that customers of Alcon's cassettes were forced to purchase Alcon's light pipes (and thus could not purchase Synergetics' competing light pipes).

The court dismissed the tying claims, concluding that Synergetics' allegations of coercion were insufficient to state a claim. For a variety of reasons, including Synergetics' failure to plead the price of standalone cassettes, the court could not determine whether the discounts that Alcon provided on cassette/light pipe bundles made it uneconomical to purchase the standalone cassettes. The court also dismissed Synergetics' predatory pricing claims for failure to plead likelihood of recoupment.

For further information on this topic please contact Eric J Stock at Hogan & Hartson LLP by telephone (+1 212 918 3000), fax (+1 212 918 3100) or email (ejstock@hhlaw.com).

Endnotes

(1) Case No 0v Civ 31 (ED Mo, Sept 28 2009).

(2) No 08 Civ 3669 (SDNY, June 4 2009 and Aug 18 2009).

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