Legal Library: Cases and Proceedings

An administrative law judge upheld the administrative complaint that charged that the North Texas Specialty Physicians (NTSP), a physician group practicing in Forth Worth, Texas, collectively determined acceptable fees for physician services in negotiating contracts with health insurance plans and other third party payers; thus engaging in horizontal price fixing. On December 1, 2005, the Commission issued a unanimous decision upholding the allegations that NTSP negotiated agreements among participating physicians on price and other terms, refused to negotiate with payers except on terms agreed to among its members, and refused to submit payors offers to members if the terms did not satisfy the group’s demands. The Commission concluded that the group’s contracting activities with payors amounts to unlawful horizontal price fixing and that respondent’s efficiency claims were not legitimate and not supported by the evidence.

The respondent appealed the Commission decision to the U.S. Court of Appeals for the Fifth Circuit. The Court agreed with the Commission that the anticompetitive effects of NTSP’s practices were obvious. Per remand by the Court, the Commission modified one provision of its remedial order, issuing a Final Order in September 2008. On February 28, 2009, the U.S. Supreme Court denied NTSP's petition for review.

The Commission remedied competitive problems raised by Owens Corning’s proposed acquisition of glass fiber reinforcements and composite fabric assets 8 from Compagnie de Saint Gobain. The investigation involved cooperation among staff of the FTC, the European Commission, and Mexico’s Federal Competition Commission. After staff from the competition agencies raised antitrust concerns, the parties modified their agreement to exclude Saint Gobain’s glass fiber reinforcement assets in the U.S. and certain assets in Europe. The Commission’s consent order addressed additional competitive problems in the highly concentrated North American market for continuous filament mat, which is used in the production of non-electrical laminate, marine parts and accessories, and other products. The order requires Owens Corning to divest sufficient U.S. continuous filament mat facilities, assets, and intellectual property to enable the buyer effectively to produce and sell the products in competition with the new Owens Corning/Saint Gobain joint venture.

The Commission settled charges with two small groups of orthopedic physicians in the Cincinnati area that had formed an independent practice association that jointly negotiated contracts regarding the rates its physician members would charge health plans and other payors for their services. In addition to the usual prohibitions on joint negotiations, the Commission’s order disbanded the IPA and prohibited future collective bargaining.

A consent order allowed Genzyme’s acquisition of ILEX Oncology, Inc., but requires the companies to divest certain assets in the market for solid organ transplant acute therapy drugs. Specifically, Genzyme is required to divest all contractual rights related to ILEX’s Campath®, an immunosuppressant antibody used in solid organ transplants to Schering AG.

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.