Plasma-Derivative Protein Therapies ("Blood Plasma")Practice Area: Antitrust
Pemiscot Memorial Hospital v. CSL Ltd., rial Civ. A. No. 09-3748-GP (E.D. Pa.)
On April 7, 2010, Cohen Milstein Sellers & Toll PLLC, along with Boston-based Shapiro Haber & Urmy LLP, were appointed to serve on the Plaintiffs' Steering Committee ("PSC") in In re Plasma-Derivative Protein Therapies Antitrust Litigation, MDL No. 2109 (N.D. Ill.), an antitrust class action alleging a multi-year conspiracy to restrict output and fix prices of Ig and albumin in the United States. The Court was confronted with applications to serve on the PSC from "a legion of law firms" "qualified to represent the putative class." Ultimately, however, the Court believed that Cohen Milstein "would best, and most efficienctly, execute the duties delegated to the [PSC]." In reaching its decision, the Court stated that Cohen Milstein "has extensive experience in complex antitrust litigation, was the first to file a complaint, and later filed a detailed amended complaint which contains allegations that may prove critical to overcoming a motion to dismiss." The Court further noted that the firm's amended complaint "showcases its attorneys’ efforts in prosecuting this matter," and "therefore considered it favorably when evaluating the relative merits of the applicants." The Court also appointed Chicago-based Freeborn & Peters LLP to serve as plaintiffs' liaison counsel.
The Plaintiffs’ Steering Committee filed a Consolidated Amended Complaint on June 4, 2010.
On December 18, 2009, Cohen Milstein filed a complaint on behalf of the University of Utah (a copy of the complaint can be found to the left under "Case Documents").
On November 10, 2009, Cohen Milstein Sellers & Toll PLLC filed an amended complaint on behalf of Plaintiff Pemiscot Memorial Hospital and a class of all persons and entities in the United States who purchased certain Plasma-Derivative Protein Therapies.
The amended complaint contains extensive new factual allegations describing Defendants CSL Ltd., CSL Behring LLC and Baxter International, Inc.’s conspiracy to restrict the supply of Plasma-Derivative Protein Therapies in order to artificially raise prices for these Therapies. The amended complaint also names as a new Defendant the Plasma Protein Therapeutics Association (PPTA), a trade association in which CSL and Baxter both occupy significant leadership positions.
The gravamen of the amended complaint contends that sinking profits spurred Baxter and CSL to unlawfully agree to reduce supply and fix prices of Plasma-Derivative Protein Therapies beginning in July 2003. In the words of CSL’s Chief Economist, the Defendants wanted to use economics to “understand how to loosen the shackles of competition.”
Baxter and CSL, with the PPTA, took various actions to reduce supply and increase profitability:
- First, Baxter and CSL gained significant market share by acquiring competitors and soon thereafter closed many of these newly acquired plants, thereby reducing industry supply. Such consolidation is consistent with the advice of CSL’s Chief Economist, who stated that an “[i]ncrease in industry concentration should make price stability and/or price increases easier to sustain” because “competition erodes rents.”
- Second, the Defendants worked with the PPTA to refine a data monitoring system that could be used to police the conspiracy. CSL and Baxter also used the PPTA and other industry meetings as an opportunity to exchange inappropriate and potentially anticompetitive information. The minutes from such PPTA meetings were routinely “scrubbed” to eliminate mention of inappropriate topics.
- Third, the Defendants signaled to each other and to fellow suppliers the desirability of restricting supply to the marketplace. That is, Defendants intentionally shared competitive information for purposes of seeking to ensure that manufacturers all are restraining output and curbing growth, which thereby promotes higher prices. PPTA president Jan Bult, for example, publically stated that “we will see—and this is my prediction—that individual companies, in response to their economic challenges, will tighten supply.” CSL and Baxter similarly signaled each other and the industry, through analysts, investor calls, and the press, to restrict the supply of Plasma-Derivative Protein Therapies.
- Fourth, the Defendants frequently engaged in anticompetitive discussions involving supply and pricing issues at bars and restaurants after trade association meetings and at business meetings.
- Fifth, in an effort to ward off government intervention once the conspiracy began to produce results, Baxter and CSL, in coordination with the PPTA, publicly denied supply shortages, significantly over-reported industry supply figures and misleadingly blamed Medicare reimbursement rates for patients’ difficulties in obtaining these crucial therapies.
As a result of the Defendants’ unlawful conduct, Plaintiff and the other members of the class paid supra-competitive prices for Plasma-Derivative Protein Therapies.
Defendants’ conspiracy to restrict the supply of Plasma-Derivative Protein Therapies was so severe that it caused a nationwide shortage of life-saving treatments. According to one survey in 2005, 33% of doctors experienced significant difficulty obtaining Ig, a Plasma-Derivative Protein Therapy subject to the Defendants’ unlawful conduct, for their patients. These doctors also reported that 40% of those patients denied access to their Ig therapy had suffered adverse health effects.
While patients suffered, Defendants profited. Defendants’ coordinated efforts to restrict supply have produced favorable financial results for Defendants. The prices of Plasma-Derivative Protein Therapies have risen dramatically since 2003, and Defendants have enjoyed large profit margins ever since.