In Clayworth v. Pfizer, California Appeals Court for the First Appellate District upheld a grant of summary judgment to more than a dozen major pharmaceutical companies and the industry group Pharmaceutical Research and Manufacturers of America. In the consolidated antitrust suit, a group of pharmacists alleged that Pfizer Inc., GlaxoSmithKline PLC, and other drugmakers violated the Cartwright Act and the California Unfair Competition Law by conspiring to inflate drug prices in theU.S. and keep lower-priced Canadian drugs off the market.
The drugmakers had won at the trial court level, when the court held that the pharmacies were not entitled to damages because they passed the higher prices on to customers. The California Supreme Court reversed the “pass-on-defense” decision, holding that under the Cartwright Act, California’s antitrust law, the pass-on defense was not available. On remand, Judge Steven A. Brick granted the drugmakers’ motion for summary judgment, finding that the pharmacies had failed to provide evidence that showed a conspiracy was “more likely than not.” The First Appellate District Court affirmed, holding that the pharmacies had failed to provide any evidence to support their claims that Canadian pharmaceuticals were consistently priced below those sold in the U.S.
The three-judge panel also shot down the pharmacies’ argument that their allegations relied on direct evidence of a conspiracy, holding that the direct evidence sought to demonstrate that the drugmakers had conspired to tie increases in their pharmaceutical prices to the Consumer Price Index, not that the they had priced their drugs lower in Canada.