On November 30, 2006, the 8th Circuit Court of Appeals affirmed a district court’s ruling that Minnesota prescription drug consumers lacked antitrust standing to bring claims that pharmaceutical companies conspired to block American consumer access to lower cost prescription drugs sold in Canada. Central to the court’s decision was the question of whether federal law prohibits importation of prescription drugs from Canada. The consumer plaintiffs argued that the existence of federal law prohibiting drug importation was a myth and that the pharmaceutical companies unlawfully restricted importation of drugs resulting in higher prices to U.S. consumers by agreeing on the following: 1) requiring Canadian pharmacies to certify that they were not selling prescription drugs to person they knew or should have known were taking the drugs outside of the country; 2) monitoring orders by Canadian pharmacies and limiting orders to historic levels; 3) “blacklisting” pharmacies suspected of selling to American consumers from supply by wholesalers; and 4) cutting off supply to wholesalers who failed to abide by the “blacklist
On appeal, the 8th Circuit affirmed the lower court’s rejection of plaintiff’s federal antitrust claims because the plaintiffs lacked antitrust standing. The court explained that to establish antitrust standing the plaintiff’s injury must reflect the anticompetitive effect of the claimed violation or the anticompetitive effects made possible by the claimed violation and represent the type of loss the claimed violations would be likely to cause. Applying this standard, the 8th Circuit rejected the plaintiffs’ claims, noting that the existence of federal law prohibiting importation, not the defendant’s conduct, was the source of the anticompetitive injury alleged by the plaintiffs. The Court agreed with the lower court that drugs imported from Canada are not labeled in conformity with U.S. federal law and therefore are prohibited. The court also noted that, amendments to the Federal Food, Drug, and Cosmetic Act (FFDCA) in 2000 and 2003, which would permit limited importation of prescription drugs from Canada if certain conditions are met, “supports [the] conclusion that the pre-existing system established by the FFDCA does not permit such importation.” Thus, the plaintiffs lack antitrust standing because their alleged injury is not the result of an antitrust violation.
The 8th Circuit also affirmed the district court’s dismissal of plaintiffs’ state law claims noting that it is normal and proper to refuse jurisdiction over state law claims upon dismissal of the federal claims over which it had original jurisdiction.