In Clayworth v. Pfizer, the California Supreme Court denied a petition to rehear a consolidated antitrust suit, filed by a group of pharmacies, accusing Pfizer Inc., GlaxoSmithKline PLC and other drugmakers of conspiring to inflate drug prices in the U.S. and keeping lower-priced Canadian drugs off the market. The defendants originally won at the trial court level when the court held that plaintiffs were not entitled to damages because they passed the higher prices on to consumers. On appeal, the First District Court of Appeals affirmed the “pass-on defense.” However, the California Supreme Court reversed, holding that under the Cartwright Act, the “pass-on defense” was not available.
On remand, the trial judge granted defendants’ motion for summary judgment, holding that the plaintiffs had failed to meet their burden of providing evidence that showed a conspiracy was more likely than not. The appeals court affirmed and shot down the plaintiffs’ argument that their allegation relied on direct evidence of a conspiracy, holding that this direct evidence sought to demonstrate the defendants had conspired to tie increases in their prices to the Consumer Price Index, not that they had priced their drugs lower in Canada. And, according to the appeals court, allowing plaintiffs to amend their suit to drop the Canadian floor conspiracy this late in the suit would be unduly prejudicial. Plaintiffs petitioned the California Supreme Court to rehear the case. CA Supreme Court denied the plaintiffs’ petition.