Federal Trade Commission v. Lundbeck, Inc.
United States Court of Appeals for the Eighth Circuit
650 F.3d 1236 (2011)
Lundbeck, Inc. (Lundbeck) (defendant) acquired the rights to two drugs, Indocin IV and NeoProfen. At the time, Indocin IV and NeoProfen were the only federally approved drugs for treating patent ductus arteriosus (PDA), a life-threatening heart condition affecting babies. Although both drugs were used to treat PDA, the two drugs did not feature similar compositions and had unique side effects. After acquiring the two drugs, Lundbeck dramatically increased the price of each drug. Both drugs were distributed in hospitals during inpatient care, with neonatologists responsible for determining which drug a patient would receive. Lundbeck stopped promoting Indocin and focused on NeoProfen due to Indocin’s vulnerability to generic competition. The Federal Trade Commission (FTC) (plaintiff) brought a complaint against Lundbeck, alleging that Lundbeck’s purchase of the two drugs constituted an antitrust violation. At trial, Lundbeck provided testimony from seven neonatologists that the choice between Indocin IV and NeoProfen was based solely on medical advantages and disadvantages without regard to cost. The district court determined that the FTC had failed to show that the two drugs competed in the same product market and consequently dismissed for failure to identify a relevant market. The FTC appealed.
Rule of Law
Holding and Reasoning (Benton, J.)
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