Doctor Alleges Monopoly on Vaccine

     NEWARK (CN) – In an antitrust class action, a doctor says Sanofi Pasteur, the world’s largest producer of vaccines, uses its monopoly on meningococcal vaccines in the United States to raise prices and crush competition.



     Sanofi has “an overwhelming 93 percent market share” of the meningococcal vaccine market in the United States, according to named plaintiff Dr. Adriana Castro. She says the company maintains its monopoly through exclusionary contracts with “multiple physician buying groups,” that enforce stiff penalties if a hospital or physician tries to buy any pediatric vaccine, no matter the amount, from a Sanofi competitor.
     According to the complaint, Sanofi, a subsidiary of Sanofi-Aventis, is one of four major firms that provide pediatric vaccines in the United States, and until February 2010 was the only firm selling a meningococcal vaccine, Menactra. The vaccine protects against bacterial meningitis.
     When a competitor, Novartis, introduced a meningococcal vaccine, Menveo, in February 2010, Sanofi “redoubled its efforts to enforce its anticompetitive PBG (Physician Buying Group) contracts,” according to the complaint.
     Dr. Castro says that a “vast majority of family practices, pediatricians and other independent medical practices in the U.S. are members of a PBG,” which performs an abundance of services for their members, “including coordinating and aggregating member purchase of vaccines and other health-care supplies through group purchasing contracts with major vaccine manufacturers and medical supply distributors.”
     She says that to purchase products and vaccines, participating providers must enter into contracts with a Physician Buying Group.
     “In or before 2010, in part response to Novartis’s release of Menveo in February 2010, Sanofi intentionally altered many of its bundled pricing contracts by increasing the pediatric vaccine purchasing requirements to 100 percent for all or most of Sanofi’s vaccines. Under the new Sanofi-PBG contracts, if a purchaser buys any vaccines from a Sanofi competitor then that purchaser faces a stiff penalty on all vaccines in the Sanofi bundle,” the class claims.
     “Sanofi has actively worked with PBGs to identify and punish noncompliant physician and hospital purchasers. Each year, physician practice and hospital purchasers are required to demonstrate compliance with Sanofi’s purchaser level requirements. To do so, the physician or hospital purchaser must provide all of its vaccine purchasing records to the PBG for auditing. If a physician practice or hospital purchaser is noncompliant then it must pay substantial penalties on all Sanofi vaccines and/or be removed from the contract entirely. Once removed from the PBG contract, the physician practice or hospital would be forced to pay Sanofi penalty prices on all Sanofi vaccines, including Sanofi’s Hib vaccines Pentacel and ActHIB for which there are no reasonably adequate medical substitutes.”
     According to the complaint, due to the strict price penalties and because Novartis does not produce any vaccines besides Menveo, “there is no way that Novartis can compensate a physician practice to make up for Sanofi’s price penalties on these other products.”
     In fact, despite being labeled by many physicians as “medically superior to Menactra … Novartis would have to sell its pediatric vaccines below cost or even pay customers to use Menveo,” the complaint states.
     Castro adds: “Sanofi dominates U.S. sales in the markets for multiple pediatric vaccines, including, e.g.: (a) DTaP (inoculates against diphtheria, tetanus, and pertussis), (b) Tdap (a stand-alone booster inoculation for diphtheria, tetanus, and pertussis), (c) IPV (inoculates against poliovirus), and Hib (inoculates against haemophilus influenzae type b). Sanofi’s brand-name Pentacel combination vaccine (combining the DTaP, IPV, and Hib vaccines) is the number one combination pediatric vaccine in the U.S. Sanofi is the world’s largest producer of vaccines and a leading producer of vaccines in the U.S.”
     She seeks class damages for antitrust violations and treble damages for being overcharged. She is represented by Peter Pearlman with Cohn Lifland Pearlman Herrmann & Knopf, of Saddle Brook, N.J.

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