Legal Library: Cases and Proceedings

The order prohibits Preferred Health Services from orchestrating collective agreements and other terms for physician services when negotiating with health insurance plans and other third party payers. According to the complaint these agreements among the physician-hospital organization of doctors and the Oconee Memorial Hospital in northwestern South Carolina to collectively negotiate fees and terms of services could lead to higher health care costs and limited physician access.

The consent order settled charges that Cephalon's proposed acquisition of Cima Labs, Inc. would allow Cephalon to continue its monopoly in the United States market for drugs that eliminate or reduce the spikes of severe pain that chronic cancer patients experience. The consent order required Cephalon to grant Barr Laboratories, Inc. a fully paid, irrevocable license to make and sell a generic version of Cephalon's breakthrough cancer pain drug, Actiq, in the United States.

The consent order, designed to preserve competition in the market for the manufacture and sale of mobile radio frequency automatic meter reading technologies for electric utilities in the United States, permitted Itron's $255 million acquisition of Schlumberger Electricity, Inc. The consent order requires Itron to grant a royalty-free, perpetual, and irrevocable license to Hunt Technologies, Inc., creating an effective competitor in this market that allows utility companies and others to gather electric consumption data automatically and remotely from electricity meters.

A Roswell, New Mexico physicians’ association, Southeastern New Mexico Physicians IPA, settled charges that it and two of its employees entered into collective agreements among physician members on fees and refused to deal with health plans that did not accept the collective agreed-upon terms. According to the complaint, these practices increased the price of health care in the Roswell area. The consent order prohibits the IPA and its employees named in the consent from orchestrating agreements between physicians to negotiate with health insurance plans on behalf of any physician and deal or refuse to deal individually with any third party payer.

Bristol-Myers Squibb Company (BMS) settled charges that it engaged in illegal business practices to delay the entry of three low price generic pharmaceuticals that would be in direct competition with three of its branded drugs. The complaint alleged that BMS purposely made wrongful listings in the Orange Book of the U.S. Food & Drug Administration and that it also paid a potential competitor over $70 million to delay the entry of its generic drug. The three drugs involved in the complaint are: Taxol (containing the active ingredient paclitaxel) – used to treat ovarian, breast, and lung cancers; Platinol (containing the active ingredient cisplatin) – used for the treatment of various forms of cancer; and BuSpar (containing the active ingredient buspirone) – used to manage anxiety disorders. To prevent recurrence of Bristol's pattern of alleged improper listings, the consent order eliminates Bristol's ability to obtain a 30-month stay on later-listed patents. By denying Bristol the benefit of the 30-month stay on later-listed patents, the order would reduce Bristol's incentive to engage in improper behavior before the PTO and the FDA to obtain and list a patent for the purpose of obtaining an unwarranted automatic 30-month stay.

Baxter settled Commission concerns stemming from its $316 million proposed acquisition of Wyeth Corporation's generic injectable drug business and agreed to divest several pharmaceutical products. The Commission charged that the acquisition would reduce competition in the manufacture and sale of propofol (a general anesthetic); new injectable iron replacement therapies; metocloprarnide (used to treat nausea); and vecuronium and pancuronium (neuromuscular blocking agents used to temporarily freeze muscles during surgery). The consent order requires divestitures in each of the pharmaceutical markets.

A consent order permitted the $45 billion merger of Chevron and Texaco In., but required significant divestitures in the petroleum industry, including gasoline marketing assets, refining and bulk supply facilities, crude oil pipeline interests and terminaling facilities. Specifically, the Commission alleged that the proposed acquisition would likely substantially reduce competition in each of the following markets: 1) gasoline marketing in the western United States (in Arizona, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming), the southern United States (in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee, Texas, Virginia, and West Virginia), in Alaska and Hawaii, and smaller local areas; 2) the marketing of California Air Resources Board (CARB) gasoline in California; 3) the refining and bulk supply of CARB gasoline for sale in California; 4) the refining and bulk supply of gasoline and jet fuel in the Pacific Northwest (Washington and Oregon, west of the Cascade mountains; 5) the bulk supply of Phase II Reformulated Gasoline (RFG II) in metropolitan St. Louis, Missouri; 6) the terminaling of gasoline and other light petroleum products in Arizona (Phoenix and Tucson), California (San Diego and Ventura), Mississippi (Collins), and Texas (El Paso), and the Hawaiian islands of Hawaii, Kauai, Maui, and Oahu; 7) the pipeline transportation of crude oil from California's San Joaquin Valley; 8) the pipeline transportation of crude oil to shore from portions of the Eastern Gulf of Mexico; 9) the pipeline transportation of offshore natural gas to shore from locations in the Central Gulf of Mexico; 10) the fractionation of raw mix into natural gas liquids products at Mont Belvieu, Texas; and 11) the marketing and distribution of aviation fuel to customers in the western and southeastern United States.

The Commission charged Biovail Corporation with illegally acquiring an exclusive patent license for Tiazac, a pharmaceutical used to treat high blood pressure and chronic chest pain. The complaint further alleged that Biovail, in an effort to maintain its monopoly, wrongfully listed the acquired license in the U.S. Food and Drug Administration’s “Orange Book” for the purpose of blocking generic competition to its branded Tiazac. The consent order requires Biovail to divest part of its exclusive rights to DOV; prohibits the firm from taking any action that would trigger additional statutory stays on final FDA approval of a generic form of Tiazac; and also prohibits Biovail from wrongfully listing any patents in the Orange Book for a product for which the company already has an New Drug Application from the FDA.

A final order permitted the $4 billion merger of MCN, a natural gas utility servicing communities in Michigan, and DTE, a public utility engaged in the generation and sale of electricity in Detroit and southeastern Michigan. The consent order resolves Commission concerns that the merger would lessen competition in the local distribution of electricity and in the local distribution of natural gas in the city of Detroit and in the Michigan counties of Macomb, Monroe, Oakland, Washtenaw and Wayne. MCN is the parent of Michigan Consolidated Gas Company and DTE is the parent holding company of The Detroit Edison Company.