Legal Library: Cases and Proceedings

The Commission approved a final consent order settling charges alleging that thirty competing association members acted unlawfully by agreeing to set the prices they would charge dental insurance plans, and by refusing to deal with plans that would not accept the collectively determined prices.

The Commission authorized staff to file a complaint in federal district court charging that Alpharma, Inc. and Perrigo Company drove up the prices for over-the-counter store-brand children’s liquid ibuprofen through an agreement eliminating competition between the two firms and allowing Perrigo to raise its prices creating higher profits to then be shared between the firms. According to the complaint, while both Alpharma and Perrigo filed for U.S. Food and Drug Administration approval to sell a generic version of children’s liquid Motrin, Alpharma was eligible to sell its product at least six months before approval would be granted to Perrigo. The two companies entered into an agreement not to compete whereby Perrigo would sell the children’s liquid ibuprofen for seven years and Alpharma, while would not marketing a competing product, would receive an up-front payment and a royalty on Perrigo’s sales of the product. To settle the charges, Alpharma and Perrigo paid a total of $6.25 million in illegal profits and agreed not to enter into agreements not to compete when one party to the agreement is a first filer of an abbreviated new drug application.

The consent order permitted The Procter & Gamble Company’s acquisition of rival consumer products manufacturer The Gillette Company, provided the companies divest: 1) Gillette’s Rembrandt at-home teeth whitening business; 2) P&G’s Crest SpinBrush battery-powered and rechargeable toothbrush business; and 3) Gillette’s Right Guard men’s antiperspirant deodorant business. In addition, P&G must amend its joint venture agreement with Philips Oral Health Care, Inc. regarding the Crest Sonicare IntelliClean System rechargeable toothbrush to allow Philips to independently market and sell rechargeable toothbrushes.

A physicians’ independent practice association in Texas agreed to settle charges that it engaged in unlawful collective bargaining to set fees its members would accept from health insurance plans and advised its members against dealing individually with plans. The Commission charged that both practices resulted in higher medical costs for consumers. The consent order settling the FTC’s charges will prohibit the IPA from engaging in such anticompetitive conduct in the future.