On September 24 2009 the US District Court for the Eastern District of New York dismissed a lawsuit brought by RxUSA Wholesale, Inc against numerous drug manufacturers and major drug wholesalers.(1) RxUSA is a secondary wholesaler of pharmaceutical products, which means that it generally purchases and resells drugs from wholesalers that purchase directly from the manufacturers (known as 'authorized' wholesalers). RxUSA asserted claims for monopolization and alleged concerted refusals to deal arising out of, among other things, the fact that one of the wholesalers had terminated its relationship with RxUSA and RxUSA was unable to find a supplier.

The court dismissed the monopolization claims against all the defendants on various grounds, including that RxUSA had failed to allege that any of the defendants individually possessed market power in a relevant wholesale market. The drug manufacturers did not even compete in wholesale markets and none of the individual wholesalers was alleged to have a dominant market share. The court noted that the shared monopoly theory was not viable under existing case law.

The court also dismissed the plaintiff's allegations that the defendants conspired with one another to refuse to deal with the plaintiff. Relying in large part on the Supreme Court's recent decision in Twombly v Bell Atl Corp,(2) the court found that the plaintiff had failed to plead more than conclusory allegations of conspiracy. The court also rejected the plaintiff's contention that its allegations of parallel conduct were sufficient to survive dismissal under Twombly. The court also dismissed claims asserted against an association of pharmaceutical wholesalers and individual officers of one of the wholesaler defendants.

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).


(1) See RxUSA Wholesale, Inc v Alcon Laboratories, Inc, 2009 WL 3111728 (EDNY Sept 24 2009).

(2) 127 S Ct 1955 (2007).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.