Drug Price Comparison Antitrust Lawsuit Brought by Bona Law Moves Forward
October 28, 2014
An antitrust lawsuit brought by Bona Law on behalf of its client PharmacyChecker.com will move forward following a March 30 federal court order denying motions to dismiss the case by pharmaceutical-backed associations accused of conspiring to shut PharmacyChecker out of the market.
The order, issued by Judge Ken Karas of the U.S. District Court for the Southern District of New York, held that the complaint sufficiently alleges an antitrust claim against the National Association of Boards of Pharmacy, the Alliance for Safe Online Medicines, the Partnership for Safe Medicines, and the Center for Safe Internet Pharmacies. The court also held that the complaint sufficiently alleged a claim against NABP for false advertising under the Lanham Act.
The amended complaint alleged the defendants, who are either funded or backed by pharmaceutical manufacturers and pharmacy interests, worked with internet gatekeepers such as Google and Microsoft to restrict consumers’ access to information about international pharmacies so that U.S. consumers remain in a captive market—one with the highest drug prices in the world. PharmacyChecker.com accredits pharmacy websites—both inside and outside the United States—and publishes comparative price information for consumers seeking to save money on prescription drugs. This made PharmacyChecker one of the defendants’ targets, according to the amended complaint.
The amended complaint alleges that as a result of the defendants’ efforts to blacklist PharmacyChecker.com from the internet, PharmacyChecker lost most of its web traffic and has been effectively erased from the consumer-facing internet.
The defendants argued that their actions were to enforce U.S. law and therefore should not result in antitrust liability. Although U.S. law forbids some drug imports, it includes numerous exceptions and exempts up to 90-day personal supplies of validly prescribed medications, and the Court rejected defendants’ contentions on these grounds.
The Court also agreed with PharmacyChecker that it had pled a per se illegal group boycott, as opposed to a claim under the rule of reason. The rule of reason requires a plaintiff to demonstrate that the anticompetitive effects of the conspiracy substantially outweigh the procompetitive benefits shown by the defendants. A per se declaration means that the conduct is so inherently anticompetitive and damaging to the market that it warrants condemnation without further inquiry into its effects on the market or the existence of an objective competitive justification.
The Court also largely rejected defendants’ arguments that their conduct was government petitioning activity and therefore immune from liability under the Noerr-Pennington doctrine. The Court did, however, rule that one defendant—LegitScript—was not subject to the court’s jurisdiction due to a relatively strict New York long-arm statute.