Eisai, Inc. v. Sanofi Aventis U.S., LLC
2016 U.S. App. LEXIS 8148
3rd Cir.2016Background
- Lovenox (Sanofi) is a dominant LMWH anticoagulant in the U.S. (81.5%–92.3% market share 2005–2010); Fragmin (Eisai) entered the U.S. market in 2005 and held ~4.3%–8.2%.
- From 2005–2010 Sanofi marketed a “Lovenox Acute Contract Value Program” to hospitals/GPOs that: (1) offered volume/market-share discounts (tiered up to ~30%); (2) included a formulary-access clause preventing hospitals from favoring rivals over Lovenox; and (3) involved aggressive marketing allegedly disparaging Fragmin.
- Under the Program, failure to meet thresholds reduced discounts to a 1% base; hospitals could terminate on 30 days and still buy Lovenox at wholesale — no supply cutoff or repayment penalty was imposed.
- Eisai sued (Sherman Act §§1–2, Clayton Act §3, New Jersey Antitrust Act), claiming Sanofi’s discounts, formulary terms, and marketing produced de facto exclusive dealing, bundling of contestable and incontestable demand, and anticompetitive foreclosure.
- The District Court granted summary judgment for Sanofi; the Third Circuit reviewed de novo and affirmed, finding no substantial foreclosure or evidence of anticompetitive effects sufficient to establish antitrust injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sanofi’s Program amounted to unlawful exclusive dealing/foreclosure | Program’s discounts and formulary terms bundled incontestable and contestable demand, foreclosing rivals (68%–84% foreclosure; ‘‘dead zone’’) | Discounts and clauses were lawful, voluntary price/contract terms; no supply cutoff or repayment penalty; customers free to switch | No substantial foreclosure; program disadvantaged rivals but did not substantially lessen competition; summary judgment affirmed |
| Whether bundling theory (bundling different types of demand for same product) evades LePage’s limits | Bundling of incontestable and contestable Lovenox demand effectively excluded rivals despite above-cost pricing | LePage’s bundling rationale does not extend to bundling within a single product’s demand; no evidence equally efficient rival was blocked | Rejected novel bundling theory; LePage’s limited to multi-product bundling scenarios; plaintiff’s model lacked concrete market evidence |
| Whether conduct is price-based (apply price-cost test) or non-price exclusion | Exclusion was driven by bundling/formulary restrictions, not price; price-cost test inapplicable | Conduct primarily price/discount-driven and above-cost; price-cost test should bar claim | Court declined to apply price-cost test here but found plaintiff’s non-price theory unsupported; no need to decide test’s applicability further |
| Whether discovery denial (prior OSS deposition transcripts) was an abuse of discretion | Transcripts relevant to intent and pattern; denial prejudiced Eisai | Extensive other discovery mitigated any prejudice; transcripts irrelevant/unduly burdensome | No abuse of discretion; Eisai failed to show actual and substantial prejudice |
Key Cases Cited
- Brown Shoe Co. v. United States, 370 U.S. 294 (antitrust protects competition, not competitors)
- LePage’s Inc. v. 3M, 324 F.3d 141 (en banc) (bundled rebates by multi-product monopolist can foreclose rivals)
- United States v. Dentsply Int’l, Inc., 399 F.3d 181 (exclusive dealing via dealer restrictions can be anticompetitive)
- ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (rule of reason; price-cost test applies when price is predominant exclusion mechanism)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (price-cost test for predatory pricing requires below-cost pricing and dangerous probability of recoupment)
- Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312 (predatory bidding/pricing standards)
- Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (rule of reason focuses on the particular market facts)