Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

RITE AID CORPORATION v. AMERICAN HOME PRODUCTS CORP.

April 16, 2003

RITE AID CORPORATION, ET AL., PLAINTIFFS,
v.
AMERICAN HOME PRODUCTS CORP., ET AL., DEFENDANTS. HOOK-SUPERX, INC., ET AL., PLAINTIFFS, V. ABBOTT LABORATORIES, ET AL., DEFENDANTS. RX USA, INC., PLAINTIFFS, V. ABBOTT LABORATORIES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: I. Leo Glasser, United States District Judge

MEMORANDUM AND ORDER

Plaintiffs are a group of nineteen drug store chains and independent pharmacies claiming damages resulting from alleged price discrimination where manufacturers of brand name pharmaceuticals charged retail pharmacies one price while offering discounts to hospitals and HMOs. Defendants Abbot Laboratories, Merck & Co., G.D. Searle & Co., and Zeneca, Inc. (the "Manufacturer Defendants") moved for summary judgment in 1995 before Judge Charles P. Kocoras in the Northern District of Illinois (before whom these cases and numerous others had been consolidated for pre-trial management), but their motions were denied in early 1996. In 2000, a motion to renew those motions was denied. Manufacturer Defendants now move again to renew their summary judgment motions.

Although Manufacturer Defendants claim that subsequent decisions and developments have changed the legal and factual landscape, these changes do not warrant revisiting the original decision. For the reasons stated below, the motion is denied.

BACKGROUND

These cases were originally filed in the Middle District of Pennsylvania, but later consolidated with the other MDL cases before Judge Kocoras. The plaintiffs generally claimed that the manufacturers and wholesalers conspired to discriminate against retail pharmacies on the price of brand name pharmaceuticals. Plaintiffs in the present actions opted out of the class that Judge Kocoras certified in 1994, and therefore are referred to as the "Rite Aid Plaintiffs" when necessary to distinguish them from the certified class or from other groups who also opted out of the class action.

The Original Motion for Summary Judgment

In 1995, both manufacturers and wholesalers moved for summary judgment. As noted in a later decision, the court was "inundated with enough summary judgment material, in the form of briefs, statements of fact and appendixes, to fill a modest sized room, virtually floor to ceiling." In re Brand Name Prescription Drugs Antitrust Litig., 1999 U.S. Dist. LEXIS 6968, at *12 (N.D. Ill. Apr. 29, 1999). Although the court granted summary judgment to the wholesalers, as to the manufacturers the court denied the motions because there were sufficient facts in dispute regarding the existence of a conspiracy among the Manufacturer Defendants, based on evidence of (i) the parallel conduct of the Manufacturer Defendants toward retail pharmacies as compared to hospitals and managed care organizations, (ii) the ability of retail pharmacies to affect sales of brand name pharmaceuticals,*fn1 (iii) the creation and maintenance of a "chargeback" system*fn2 by which manufacturers police the distribution of their product at different prices, and (iv) the opportunities which Manufacturer Defendants had to conspire. See In re Brand Name Prescription Drugs Antitrust Litig., 1996 WL 167350, at *6-15 (N.D. Ill. Apr. 4, 1996).

Plaintiffs originally pointed to four slightly different categories of evidence from which the existence of the conspiracy could be proved: (i) the Manufacturer Defendants' parallel conduct toward plaintiffs, (ii) the interdependence among the Manufacturer Defendants, (iii) the creation and maintenance of the chargeback system to ensure compliance with the pricing scheme, and (iv) the Manufacturers Defendants' opportunity to conspire. See In re Brand Name Prescription Drugs Antitrust Litig., 1996 WL 167350, at *6. The court first found that sufficient evidence existed to support plaintiffs' contention that the "defendants' seemingly uniform refusal to deal with retail pharmacies was the result of conscious behavior or collusion." Id at *9; see also id. at *6-9 (examining evidence that supported inferences that parallel conduct was caused by collusive behavior). The court then found that plaintiffs offered evidence of manufacturer interdependence, meaning that the parallel conduct "would be in each conspirator's interest only if all conspirators acted alike." Id at *9-10. The court also found it was "unquestionable" that "defendants had the opportunity to conspire." Id at *10. (Judge Kocoras did not examine the chargeback system with regard to the existence of a conspiracy among the manufacturers.)

The court then examined the Manufacturer Defendants' contentions that the evidence surrounding their conduct supported the equally plausible theory that discounts were granted to hospitals and HMOs, but not to retail pharmacies, because the latter "did not possess the ability to deny manufacturers access to certain groups." Id. at *12. Plaintiffs offered evidence showing that, notwithstanding their inability to force doctors to change prescriptions, retail pharmacies "have overall been very successful" when they request that a doctor change prescriptions. Id at *13 (citing as one example a survey indicating that physicians acquiesced to pharmacist requests to substitute one drug for another in 76.9% of cases). Accordingly, the court found that plaintiffs had successfully rebutted the inference that the manufacturers' conduct was as likely as not legal.

As a result, the court held that in light of all the evidence, the factors cited "tend to exclude the possibility that the defendants were pursuing independent, legitimate interests." Id. at *15. Judge Kocoras further noted: "The record is replete with instances of collusive behavior, parallel conduct, uniformity of responses, mutual awareness of each other's policies and practices, and various incriminating quotes on the part of the defendants. While any one of these alone would not be sufficient to send the plaintiffs' case to a jury, any combination of the above is sufficient." Id Accordingly, he denied the motions for summary judgment that no conspiracy among the manufacturers could be established.

Subsequent Proceedings

Between April 1996 and late 1998, numerous settlements were reached, and class plaintiffs proceeded to trial. At the close of class plaintiffs' case, the court granted the defendants' motion for judgment as a matter of law. In re Brand Name Prescription Drugs Antitrust Litig., 1999 WL 33889 (N.D. Ill. Jan. 19, 1999), aff'd, 186 F.3d 781 (7th Cir. 1999).

In 2000, following the affirmance by the Seventh Circuit, the Manufacturer Defendants sought to renew their motion for summary judgment against the Rite Aid Plaintiffs in light of the directed verdict against the class plaintiffs. The court denied that motion. See In re Brand Name Prescription Drugs Antitrust Litig., 2000 WL 204061 (N.D. Ill. Feb. 10, 2000). In so doing, the court determined that it would be unfair to burden the Rite-Aid Plaintiffs with the choices made by the class plaintiffs, especially given that there was a much larger universe of possible evidence that could be used when compared to the evidence actually put forward by the class plaintiffs during the trial. Id at *3-5. However, the court also denied leave on the ground that it would be futile since he would deny summary judgment in any event. Id at *5.

Later in 2000, pursuant to Rule 54, the court entered a partial final judgment to permit appeal of the summary judgment granted previously to the wholesalers. The Manufacturer Defendants then sought certification for interlocutory appeal of the decision denying them summary judgment, but this motion was denied. In re Brand Name Prescription Drugs Antitrust Litig., 2000 U.S. Dist. LEXIS 24999 (N.D. Ill. Mar. 9, 2001). The court specifically rejected the Manufacturer Defendants' claim that the lack of factual evidence to support a claim for conspiracy that included ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.