In In re: Hypodermic Products Antitrust Litigation, the Third Circuit held that the direct purchasers of Becton Dickinson & Co.’s hypodermic products are the company’s distributors and not health care providers. The providers therefore lack standing to pursue federal class action antitrust damages claims against the medical technology company.
The court relied on several factors in reaching its conclusion. Health care providers placed orders through the distributors, and the distributors negotiated prices and shipped the products to the health care providers. The providers also paid the distributors, not the manufacturer. “Because the hypodermic products pass through at least one other stage in the chain of distribution before reaching health care providers,” the court concluded, “the distributors, not health care providers, are the direct purchasers in contract sales.”
In 2010, the distributors agreed to settle their claims with Becton Dickinson & Co. for
$45 million, but the district court refused to sign off on the settlement because it was opposed by the health care providers. The district court had held that the providers were the real direct purchasers and thus entitled to see damage under federal antitrust laws. By reversing that decision, the Third Circuit’s ruling will likely facilitate the implementation of the agreed settlement.