Antitrust Law Daily Wrap Up, ANTITRUST—D. Or.: Compounding pharmacy partially granted redaction of complaint against certifier, (Apr 22, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

Self-appointed "for-profit company that was initially founded in 2007 to verify the legitimacy of online pharmacies" accused of conspiring with Big Pharma against compounding pharmacies.

The federal district court judge in Portland, Oregon has partially granted compounding pharmacy operator Empower's motion to redact some of its documents. The compounding pharmacy filed an antitrust suit against LegitScript, an evaluator of online pharmacies, alleging a group boycott under the Sherman Act and the laws of New Jersey and Texas. Some of the redactions were allowed, while others were denied. With respect to the denied redactions, Empower was given leave to file a renewed motion showing good cause for redaction, or filing an amended complaint without the information that was denied redaction. A similar case against LegitScript is pending in the same district, having been initially filed in the Southern District of New York in 2019, and transferred from there to the District of Oregon in 2022. Although the summons to LegitScript has been issued and served upon its registered agent, counsel for LegitScript had not made an appearance at the time the court ruled upon Empower's motion (Empower Clinic Services, L.L.C. v. LegitScript LLC, No. 3:25-cv-00514-AB (D. Or. Apr. 11, 2025)).

During the first decade of the Twenty-First Century, the problem of unscrupulous entrepreneurs selling counterfeit pharmaceuticals via the Internet was on the rise. This posed an obvious health hazard to patients who used such "drugs" instead of genuine drugs validly prescribed. In 2007, LegitScript, LLC set itself up, analogous to the models of the Underwriters Laboratories (UL) or the American National Standards Institute (ANSI), as a non-governmental entity to evaluate and certify the Internet purveyors of pharmaceuticals. LegitScript operates as a for-profit enterprise.

Empower Clinic Services, LLC operates a compounding pharmacy that is registered as such with the FDA and that specializes "in creating patient-specific medications tailored to individual needs. One class of drugs that lends itself to such custom compounding is the glucagon-like peptide 1 receptor agonists (GLP-1), medications with proprietary names such as Ozempic®, Wegovy®, Mounjaro®, and Zepbound®. Although the primary uses of these medications was to treat diabetes conditions, the realization that weight loss is a side effect caused a heightened interest in GLP-1 drugs that led to the drugs' placement on the FDA's drug shortage list. This presented increased business opportunities for compounding pharmacies such as Empower.

On March 26, 2025, Empower filed a complaint against LegitScript, alleging that LegitScript, acting along with other unnamed co-conspirators, abuses its market power by creating a group boycott against Empower by implementing "increasingly anticompetitive rules that are not reasonably necessary or narrowly tailored to achieve any procompetitive justification," effectively prohibiting those entities to whom it grants certification from using the services of entities such as LegitScript that it does not certify. The complaint, some of its exhibits, and a declaration by Empower's CEO all had portions blacked out.

Empower moved to file the unredacted versions under seal. Although the summons to LegitScript has been issued and served upon its registered agent, counsel for LegitScript had not made an appearance at the time the court ruled upon Empower's motion.

Redaction-direct quotes from customers. The court denied Empower's motion to redact from the complaint direct quotes from e-mailed communications from Empower's customers. Here, the quotes concededly were not trade secrets, and Empower did not substantiate the "competitive harms" it contended might befall it if such information were to be disclosed. Moreover, the court did not accept Empower's contention that disclosure would violate Empower's own policies regarding internal communications, observing that Empower "could have described the communications instead of using direct quotations and dates."

Redaction-customer names. The court granted Empower's motion to redact customer names and e-mails, and Empower's proprietary pricing strategy, from the complaint and from its CEO's declaration. Public disclosure of this information could place Empower at a disadvantage in its negotiations for future contracts. Empower was thus permitted to redact this information from the publicly available versions of the documents, and to file the unredacted versions under seal.

Redaction-personal information. The court partially granted Empower's motion to redact personal information from some of its exhibits. The court denied redaction of the names of Empower's general counsel and one of Empower's vice presidents, finding that redaction of the name, standing alone, was not warranted. The court did, however, grant the motion to redact certain non-publicly available telephone numbers, e-mail addresses, and home addresses, finding concerns over harm or identify theft to be justifiable under the circumstances.

The Case is No. 3:25-cv-00514-AB.

Judge: Baggio, A.

Attorneys: Alexandra Choi Giza (Stoel Rives LLP) for Empower Clinic Services, L.L.C. Paul M. Balmer (Tonkon Torp LLP) for LegitScript LLC.

Companies: Empower Clinic Services, L.L.C.; LegitScript LLC

Cases: Antitrust OregonNews