Antitrust Law Daily Wrap Up, ANTITRUST—W.D. Pa.: Pharmacists lack standing to claim that Express Scripts-Medco combination would create monopsony power over state retail pharmacy services markets, (Jul 1, 2013)

By Tobias J. Gillett, J.D., LL.M.

The National Community Pharmacists Association and other plaintiffs failed to allege an antitrust injury that would give them standing to bring an antitrust claim over the alleged anticompetitive effects of pharmacy benefits management company Express Scripts, Inc.’s acquisition of Medco Health Solutions, Inc. on the sale of retail pharmacy services in state markets, the federal district court in Pittsburgh has ruled (National Community Pharmacists Association v. Express Scripts, Inc., June 28, 2013, Bissoon, C.).

The plaintiffs filed suit against pharmacy benefits management company Express Scripts and Medco, alleging that Express Scripts’ acquisition of Medco would have anticompetitive effects under a variety of theories. The court dismissed the claims under most theories, but gave leave to amend three of them. In its present order, the court addressed the defendants’ motion to dismiss the claim that the transaction would give the combined entity “monopsony power as purchasers of retail pharmacy services in state markets.”

In its initial order dismissing the plaintiffs’ allegations, the court found that the “allegations of potentially reduced output as a result of the merger would be the result of the merged-Defendants’ mere unilateral lowering of reimbursement rates, which is well-recognized not to give rise to an anti-trust injury.” In their amended complaint, the plaintiffs contended that the defendants, by agreeing to merge, had engaged in collusive behavior, and “that this alleged collusion is in close proximity to the injury that they would suffer as a result of suboptimal reimbursement rates,” thus giving rise to a cognizable antitrust injury.

However, the court dismissed this claim. The court observed that the plaintiffs had pled “no improper collusion between Defendants with respect to reimbursement rates as part of the merger agreement.” Since the plaintiffs’ potential injury seemed “to stem purely from the unilateral, non-predatory actions of the merged entity itself,” the court concluded that the plaintiffs “simply have not alleged a plausible connection between [the alleged antitrust violation] and their alleged injury-in-fact.” Therefore, the court dismissed the plaintiffs’ claims with respect to the sale of retail pharmacy services in state markets.

The case is Civil Action No. 12-395.

Attorneys: Charles B. Gibbons (Buchanan Ingersoll & Rooney PC) for National Community Pharmacists Association. Arthur H. Stroyd, Jr. (Del Sole Cavanaugh Stroyd LLC) for Express Scripts, Inc.

Companies: National Community Pharmacists Association; Express Scripts, Inc.

Cases: Antitrust PennsylvaniaNews