Pharma Firms Can't Duck Antitrust Claim
SAN FRANCISCO (CN) - A federal judge denied partial summary judgment requested by five pharmaceutical companies that make products from human blood plasma, rejecting their claim that plaintiff San Mateo County "may not seek damages from defendants for blood plasma products purchased from rival non-conspirators at prices that were inflated by defendants' anti-competitive conduct."
San Mateo County sued CSL Limited, CSL Behring, CSL Plasma, Baxter International, and the Plasma Protein Therapeutics Association in a California antitrust complaint.
The CSL entities and Baxter control about 60 percent of the U.S. market for all plasma-derivative protein therapies, U.S. Magistrate Judge Jacqueline Scott Corley wrote in her Aug. 20 ruling.
Baxter and CSL sell the therapies directly to health-care providers or to distributors. At issue here are the plasma-derived protein therapies IVIG and albumin, among others.
San Mateo County bought its IVIG and albumin indirectly, from two nonparty distributors.
The county claims that "beginning in 2003 CSL and Baxter, along with the trade group Plasma Protein Therapeutics Association, conspired to reduce the supply of plasma-derivative protein therapies. This conspiracy caused artificial shortages of IVIG and albumin, which in turn caused inflated prices for those therapies that were paid by Plaintiff. At least for purposes of this motion, the parties do not dispute that plaintiff was unable to avoid the price increases by, for example, purchasing substitutes for IVIG and albumin.
"The vast majority of the IVIG and albumin plaintiff purchased was manufactured by non-defendants that are not alleged to have participated in any conspiracy. While plaintiff purchased some IVIG and albumin from CSL, it made no such purchases from Baxter. Plaintiff contends that the IVIG and albumin purchased from non-conspirators were nevertheless purchased at supracompetitive prices caused by defendants' conspiracy to reduce supply."
The defendants, "relying solely on federal case law," claimed that any overcharge the county may have paid is "unacceptably speculative," the judge wrote.
However, "The Court is not persuaded. The overcharge damages flowing from purchases from non-conspiring rivals are based on the same calculation that must be made for damages flowing from purchases from defendants; that is, the amount over the price that would have occurred in the absence of the anticompetitive conduct. ... California law, in contrast to federal law, allows indirect purchasers in a multi-tiered distribution chain to sue and collect damages, such as overcharges, from antitrust defendants."
Calculating the overcharges "is no simple feat - and the task may ultimately be insurmountable for plaintiff," the judge wrote.
However, "it does not follow that it will be impossible for plaintiff to make a non-speculative estimation of such damages."
"Nor is it impossible for plaintiff to establish with a 'reasonable probability,' id., that defendants' supply restriction caused a price umbrella; that is, caused plaintiff to incur an overcharge when purchasing IVIG and albumin from non-conspirators. To the extent defendants contend that such a determination cannot be made with complete certainty, defendants overstate plaintiff's evidentiary burden."
Summing it up, the judge wrote: "At bottom, defendants' argument is that because the Ninth Circuit has held that umbrella damages are not recoverable under the [federal] Sherman Act, they are not recoverable under the [California] Cartwright Act. The Court disagrees."