Update August 2011: The Eighth Circuit affirmed, holding that the FTC failed to show that the lower court’s findings of fact were clearly erroneous. In particular, the court held that the FTC failed to show that the hospitals actually paying for the drugs in question directly influenced the doctors’ choice of which drug to prescribe.
The FTC has appealed to the Eighth Circuit a decision to dismiss antitrust claims against Lundbeck, Inc. – a pharmaceutical company. District of Minnesota Judge Joan N. Ericksen held that Lundbeck could retain two drugs that it had acquired becauyse .they were not in the same product market. Although both drugs treated the same condition, the court found that different doctors preferred each drug and were unlikely to switch if Lundbeck raised its prices.
In its appeal, the FTC argued that Judge Ericksen failed to consider “marginal customers,” who would switch if prices were increased. The FTC further argued that there were numerous inconsistencies in the judge’s ruling, pointing out that Judge Ericksen acknowledged that both drugs were equally effective at treating the same heart condition; while at the same time, holding the drugs in separate product markets.
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