Medical Test Antitrust Claim Sent Back

     SAN FRANCISCO (CN) – A federal judge dismissed with leave to amend an antitrust claim that Quest Diagnostics cornered the market for diagnostic testing services and overcharges for them.
     Lead plaintiff Colleen Eastman sued Quest in January, under the Sherman Antitrust Act and California antitrust and unfair competition laws.
     “Because of how important routine diagnostic testing is to the health of patients, it is imperative to preserve vigorous competition among providers on price and quality,” she said in the complaint.
     Rheumatology Diagnostics Laboratory and Hunter Laboratories filed a similar complaint against Quest in November 2012, claiming it conspired to monopolize biological testing by selling tests at below cost, squeezing them out of the market.
     Quest sought to dismiss Eastman’s the complaint, claiming the plaintiffs lack standing because they “do not allege that Quest’s conduct had any impact on the amount they paid for Quest’s services.”
     U.S. District Judge William Orrick agreed Tuesday, writing: “Because plaintiffs have not sufficiently alleged that they were injured as a result of Quest’s conduct, they lack standing and their claims are dismissed with leave to amend.”
     Orrick’s ruling resembled one from U.S. District Judge Jon Tigar, who rejected antitrust claims in Rheumatology Diagnostics Lab, Inc. v. Aetna, et al.
     Both cases were filed in the Northern District of California.
     In his ruling, Orrick said the plaintiffs missed some important points.
     “As in Rheumatology, Quest’s alleged discounts to medical providers do not show antitrust injury,” Orrick wrote. “Plaintiffs allege that the discounts allow Quest to charge ‘monopoly prices’ or ‘above-competitive prices’ on its plan/out-patient business, but they have not alleged what Quest’s prices are or how they compare to competitive prices. Rather, they assert Quest ‘must add a monopoly premium for pull-through testing to compensate for its below-cost prices. This allegation is conclusory and speculative and does not satisfy the requirement to plead plausible claims.”
     Orrick dismissed all four claims, with leave to amend by June 29.

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