Lawsuit Claims Trade Body Conspired to Stifle Competition

ALEXANDRIA, Va. (CN) – A Massachusetts firm that provides supply-chain services to the pharmaceutical and life-sciences industries claims a trade association coerced its members and suppliers to use the organization’s drug-shipment tracking system rather than those of competitors.

In a federal lawsuit filed in Alexandria, Va. on Oct. 23, TraceLink Inc. claims the Healthcare Distribution Alliance learned of Tracelink’s intention to offer “track and trace” services for pharmaceutical shipments — a logistics space the alliance currently dominates — and then engaged in a conspiracy to lock up long-term contracts with customers and shut competitors out of the market.

Pharmaceutical shipments have strict chain of custody rules under the Drug Supply Chain Security Act, and the Healthcare Distribution Alliance allegedly controls 80 percent of the market for monitoring those deliveries.

According to the lawsuit, the Alliance represents pharmaceutical distributors and provides the link to manufacturers, pharmacies, hospitals, long-term care facilities, and clinics nationwide.

Its track and trace product is called “Origin.”

“The HDA has used its ‘association’ status to coerce or persuade its members to use Origin and, in turn, to not use the track and trace products offered by private competitors, including plaintiff TraceLink,” the complaint filed by J. Wyatt Fore of Constantine Cannon LLP in Washington, D.C. claims.

“By forcing a closed system upon the industry, HDA, as described more fully herein, has raised costs for customers that, but for the coercive and conspiratorial acts of HDA and certain powerful HDA members, would have been willing to use rival track and trace technology supplied by competitors,” the complaint says.

“It also has led or will lead to customers paying supra-competitive prices for track and trace technology,” TraceLink claims. “And it will stunt continued innovations that otherwise would have been made in this technology.”

TraceLink seeks $30 million in damages on claims the alliance violated the Sherman Act and the Virginia Antitrust Act.

A representative of the Healthcare Distribution Alliance said the organization is reviewing the complaint and does not have a comment at this time.

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