Omnicare, Inc. v. Unitedhealth Group, Inc.
2011 U.S. App. LEXIS 495
| 7th Cir. | 2011Background
- Omnicare sued UnitedHealth, PacifiCare, and RxSolutions alleging a buyers' cartel to depress reimbursement for institutional pharmacy services in the Part D market.
- The United–PacifiCare merger occurred in 2005; PacifiCare's RxSolutions operated as PacifiCare's PBM negotiating with Omnicare, while United later joined PacifiCare's Part D strategy.
- Before closing, United and PacifiCare exchanged information and discussed Part D strategies; a strategic options memo allegedly outlined using RxSolutions as a stalking horse for favorable contracts.
- Omnicare signed PacifiCare's any-willing-provider contract with a low reimbursement rate, after negotiations broke down and United had delayed raising concerns about Patient Protections.
- CMS approved Part D networks; after merger, United shifted to PacifiCare’s contract terms, and Omnicare sued for antitrust, fraud, and unjust enrichment, among others.
- District court granted summary judgment for Defendants; on appeal, court conducted a holistic, de novo review of the evidence and affirmed dismissal of Sherman Act claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a contract, combination, or conspiracy under §1 | Omnicare asserts a buyers' cartel and coordinated strategy. | Defendants contend independent, legitimate merger due diligence and negotiations, not a conspiracy. | No genuine issue of material fact; no §1 agreement established. |
| Whether pre-merger information exchange supports conspiracy | Pricing data exchanges and SOM show collusion. | Exchanges are ambiguous, high-level, and not probative of a conspiracy; due diligence context matters. | Evidence insufficient to show a conspiratorial agreement; independent action possible. |
| Whether the merger agreement carve-out sustains an inference of collusion | Carve-out, coupled with information flow, indicates illicit coordination. | Carve-out and high-level review support independent action; timing and ambiguity undermine inference of conspiracy. | Ambiguity resolved in favor of independent action; carve-out not proof of conspiracy. |
| Whether PacifiCare's negotiating tactics and PacifiCare’s contract with Omnicare prove collusion | PacifiCare’s hard-line bargaining and exclusive agreement indicate coordinated strategy with United. | Tactics reflect independent rational negotiation; no evidence of joint plan. | No, cannot conclude conspiracy from tactics alone; independent action plausible. |
| Whether United's conduct toward Omnicare supports a Sherman Act claim under the overall theory | United manipulated timing and withheld concerns to force Omnicare to accept PacifiCare terms. | Conduct viewed in full context shows legitimate concerns and ongoing renegotiations; no conspiratorial intent proven. | When viewed holistically, no anticompetitive agreement; claim fails. |
Key Cases Cited
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984) (requires showing a conscious commitment to a common unlawful scheme)
- Am. Needle, Inc. v. Nat'l Football League, 130 S. Ct. 2291 (2010) (two independent decisionmakers must join to form a conspiracy)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (reversing inference from ambiguous evidence requires showing conspiracy is more likely than independent action)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plaintiff's conspiracy evidence must rule out independent action at summary judgment)
- High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651 (7th Cir. 2002) (holistic evaluation of evidence required; avoid piecemeal reasoning)
- In re Pharmacy Benefits Managers Antitrust Litig., 582 F.3d 432 (3d Cir. 2009) (PBMs context for antitrust liability and merger dynamics)
- Tri-Gen Inc. v. Int'l Union of Operating Eng'rs, Local 150, 433 F.3d 1024 (7th Cir. 2006) (summary judgment standard and Market Force test framework)