Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Aug 29, 2024)

By WK Editorial Staff

A periodic roundup of other items of interest to the Antitrust and Trade Regulation community.

ANTITRUST NEWS: House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) is calling on the CEOs of three major Pharmacy Benefit Managers (PBMs)—CVS Caremark, Express Scripts, and Optum Rx—to correct the record for statements made during their appearance before the House Oversight Committee hearing held July 23, 2024 titled: “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III: Transparency and Accountability.” At the hearing, the PBM chief executives made statements that contradict the Committee’s and the FTC's findings about the PBMs’ self-benefitting practices that jeopardize patient care, undermine local pharmacies, and raise prescription drug prices. The chief executives for CVS Caremark, Express Scripts, and Optum Rx claimed they do not steer patients to PBM-owned pharmacies. The executives also made claims contradicting the Committee’s and FTC’s findings regarding contract negotiations, contract opt outs, and payments to pharmacies.

ANTITRUST NEWS: Connecticut Attorney General William Tong announced an agreement with Northwell Health, Inc. and Northwell Healthcare, Inc. (collectively “Northwell”) and Nuvance Health (Nuvance) to preserve labor and delivery services at Sharon Hospital and to strengthen access to local healthcare in Western Connecticut, resolving an antitrust investigation by Connecticut and New York into the proposed affiliation between the two hospital systems. Nuvance is comprised of Danbury Hospital, New Milford Hospital, Norwalk Hospital, and Sharon Hospital in Connecticut, as well as three hospitals in New York, and Northwell Health is a comprehensive, integrated health care delivery system that is comprised of 21 hospitals across New York. Under the agreement of assurances, signed by offices of the attorneys general for both Connecticut and New York, Northwell Health agrees to several enforceable conditions for five years to maintain competition in the healthcare market and affordable access to healthcare. The conditions include negotiating rates for reimbursement of services independently for Connecticut and New York facilities, and to otherwise comply with the terms of Connecticut’s new statute prohibiting all-or-nothing, anti-steering, anti-tiering clauses in network agreements between payors or plan sponsors and providers.

ANTITRUST—W.D. Tenn.: The federal district court in Memphis will allow Illinois indirect purchasers to participate in a settlement between Varsity Brands and a class of cheerleaders and their parents who accused the company of monopolizing the competitive cheerleading industry. In June, the court granted preliminary approval to an $82.5 million settlement, and certified a state law damages class that included thirty-three states and the District of Columbia (the State Law Damages Class). Illinois was not among the states included in the State Damages Class, as the Court had previously dismissed the antitrust and consumer protection laws brought under Illinois state law based in part on the fact that the state’s laws only permit its attorney general to bring a class action on behalf of indirect purchasers. The parties were joined by the Illinois Attorney General in requesting leave to participate in the State Law Damages Class. The court found there was good cause to grant the motion for leave to participate in the settlement on the same basis as the other members of the State Law Damages Class (Jones v. Varsity Brands, LLC, No. 2:20-cv-02892-SHL-tmp (W.D. Tenn. Aug. 23, 2024)).

ANTITRUST—D. Kan.: The federal district court in Kansas City, Kansas, rejected a motion for discovery as untimely in a suit alleging Mylan Pharmaceuticals Inc. engaged in unlawful monopolization of the epinephrine autoinjection drug device market. Direct EpiPen purchasers sought an order requiring Mylan, N.V., Mylan Pharmaceuticals Inc., and Mylan Specialty L.P. to produce documents withheld pursuant to the Mylan’s amended privilege log and to produce documents responsive to Request for Production (“RFP”) Nos. 19 and 21. The direct purchasers acknowledged that their motion to compel responses to was untimely. The court rejected the argument that the direct purchasers were diligent in attempting to resolve the dispute, warranting an extension of the time period to file their motion to compel. The court denied the motion, although with regard to the amended privilege log, the motion was denied without prejudice (KPH Healthcare Services, Inc. v. Mylan N.S., No. 2:20-cv-02065-DDC-TJJ (D. Kan. Aug. 20, 2024)).

ANTITRUST—E.D. Pa.: The federal district court in Philadelphia granted a motion to amend a class alleging that Merck Sharp & Dohme Corporation engaged in illegal conduct that forecloses competition in a significant portion of the rotavirus vaccine market. The mayor and city council of Baltimore, Maryland, a self-insured third-party payor, alleged that Merck engaged in illegal conduct that foreclosed competition in a significant portion of the pediatric rotavirus vaccine market by imposing loyalty conditions in vaccine contracts that threatened customers with higher prices if the customers did not buy a designated bundle of Merck rotavirus vaccines. Baltimore defined the class it sought to represent as “All entities that (i) are third-party payors that (ii) have purchased, paid, and/or provided reimbursement for some or all of the purchase price of RotaTeq; (iii) for consumption by their members, employees, insureds, participants, or beneficiaries (iv) in one of the Repealer Jurisdictions (v) after March 3, 2019, and (vi) do not fall within any of the two exclusion categories.” Baltimore moved to remove the exclusion category: “fully insured health plans (i.e., health plans that purchased insurance from another third-party payor covering 100% of the plan’s reimbursement obligations to its members).” Baltimore was granted approval to change the class as it would eliminate redundancies. Because it is too early to rule on the ascertainability of the class, the court granted Baltimore’s motion to amend and denied Merck’s motion to strike class action allegations (Mayor and City Council Of Baltimore v. Merck Sharp & Dohme Corp., No. 2:23-cv-00828-GAM (E.D. Pa. Aug. 28, 2024)).

ANTITRUST—D.D.C.: The FTC’s motion to dismiss the America First Legal Foundation’s suit to compel the FTC to disclose documents under the Administrative Procedure Act (APA), Mandamus Act, and Freedom of Information Act (FOIA), related to FTC’s regulation of Twitter, has been granted by the federal district court in the District of Columbia. The request sought records related to a U.S. House of Representatives Judiciary Committee staff report entitled “The Weaponization of The Federal Trade Commission,” and the Committee’s report detailing the FTC’s purportedly “inappropriate” use of its regulatory power to “harass” Twitter after Elon Musk’s acquisition of the company. The court dismissed the Foundation’s APA claim because FOIA provides an adequate remedy in the form of de novo judicial review of FTC’s withholding. The court dismissed the mandamus claim for lack of subject-matter jurisdiction. The Foundation must seek relief under FOIA itself, according to the court (America First Legal Foundation v. United States Federal Trade Commission, No. 23-cv-02765 (D.D.C. Aug. 25, 2024)).

ANTITRUST NEWS: The Australian Competition & Consumer Commission (ACCC) is seeking views from the aviation industry and other interested parties on its preliminary view to not object to Airservices Australia’s proposal to increase the prices it charges airlines. Airservices Australia is proposing a weighted average of 6 per cent price increase across its enroute navigation, terminal navigation, and aviation rescue and fire-fighting services. The ACCC considers that Airservices’ proposed price increase is unlikely to lead to it over-recovering its costs or being above efficient levels.

ANTITRUST NEWS: The Australian Competition & Consumer Commission (ACCC) has granted interim authorization to Catholic Health Australia Limited (Catholic Health) to enable Catholic Health’s members to continue with their data sharing and collective bargaining arrangements, as well as a limited collective boycott of large suppliers in certain circumstances. This is the same conduct authorized in the ACCC’s current authorization A91400 in 2014. The Interim authorization does not extend to the proposed boycott of the major private health insurers.

ACQUISITIONS & MERGERS NEWS: Nano Dimension Ltd., a leading supplier of Additively Manufactured Electronics and multi-dimensional polymer, metal & ceramic Additive Manufacturing 3D printing solutions, announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired in connection with its definitive agreement to acquire Desktop Metal, Inc. As a result of the expiration of the waiting period, no further regulatory review by U.S. antitrust authorities is required in connection with the acquisition. The companies jointly announced in July 2024 that they have entered into a definitive agreement under which Nano Dimension will acquire all outstanding shares of Desktop Metal in an all-cash transaction valued at approximately $135 million.

FRANCHISING & DISTRIBUTION—W.D. Wash.: The federal district court in Seattle has granted a Motion to Compel Arbitration filed by franchisor Nurse Next Door Home Healthcare Services, Inc. (NND), to compel arbitration of Aaron and Priyanka Sipp and Sipp Healthcare LLC and their franchise-related disputes. The Sipps are Florida-based franchisees of NND, who have filed a lawsuit against NND in Florida, claiming that NND sold them franchises that they could never operate fully in Florida. Although the Sipps conceded that they are bound by an arbitration agreement, they argued that NND failed to comply with a mediation pre-requisite contained in the arbitration agreement and that enforcement would be unfair and unconscionable. Here, the parties unmistakably delegated the question of enforcement of the arbitration agreement to the arbitrator: “The Parties agree that all issues of arbitrability, including the scope, validity, and enforceability of the arbitration clause, are delegated to the arbitrator and the arbitrator shall have full and complete authority to decide any such issues.” Under this clear language, the Sipps must raise their arguments against enforcement of the arbitration clause for NND’s purported failure to mediate before the arbitrator. Additionally, the Sipps’ claims that enforcement of the arbitration provision is unconscionable has been delegated to the arbitrator to decide. Lastly, the court remained unconvinced that the arbitration venue provision is substantively unconscionable. The arbitrator has the authority to decide this issue under the terms of the arbitration agreement, which is enforceable, the court said (Nurse Next Door Homehealthcare Services (USA), Inc. v. Sipp, No. 2:24-cv-00884-MJP (W.D. Wash. Aug. 19, 2024)).

Attorneys: Joseph R. Saveri (Joseph Saveri Law Firm, LLP) for Jessica Jones. Adam S. Baldridge (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC) for Bain Capital Private Equity. Scott Alexander Edelman (Milbank LLP) for Charlesbank Capital Partners, LLC. Paul Coggins (Locke Lord LLP) for Jeff Webb. Bradley Wilders (Stueve Siegel Hanson, LLP) for KPH Healthcare Services, Inc. a/k/a Kinney Drugs, Inc. and FWK Holdings, LLC. Adam K. Levin (Hogan Lovells US, LLP) for Mylan N.V and Mylan Pharmaceuticals, Inc. Daniel H. Silverman (Cohen Milstein Sellers & Toll PLLC) for Mayor and City Council of Baltimore. Andrew D. Lazerow (Covington & Burling LLP) for Merck Sharp & Dohme Corp. Juli Zsuzsa Haller (America First Legal Foundation) for America First Legal Foundation. John Bardo, U.S. Department of Justice, for the FTC. Lane Conrad (Miller Nash LLP) for Nurse Next Door Home Healthcare Services USA Inc. Howard Ramsey Morrill (Howard R. Morrill, Attorney at Law) for Aaron Sipp.

Companies: CVS Caremark; Express Scripts; Optum Rx; Northwell Health, Inc.; Northwell Healthcare, Inc.; Nuvance Health; Nano Dimension Ltd.; Desktop Metal, Inc.; Bain Capital Private Equity; Charlesbank Capital Partners, LLC; KPH Healthcare Services, Inc. a/k/a Kinney Drugs, Inc.; FWK Holdings, LLC; Mylan Pharmaceuticals, Inc.; Merck Sharp & Dohme Corp.; Airservices Australia; Catholic Health Australia Limited; America First Legal Foundation; Nurse Next Door Home Healthcare Services USA Inc.

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