Warren General Hospital v. Amgen Inc.
2011 U.S. App. LEXIS 11982
| 3rd Cir. | 2011Background
- Warren General Hospital sues Amgen for unlawfully tying WBCGF drugs to RBCGF drug Aranesp, through a rebate-driven scheme.
- Amgen’s WBCGF drugs Neupogen and Neulasta allegedly tied to Aranesp, leveraging insurance reimbursements to impair competition in RBCGF market.
- Warren General purchases Amgen drugs through AmerisourceBergen, a middleman wholesaler, not directly from Amgen.
- District Court dismissed for lack of antitrust standing under Illinois Brick, deeming Warren General an indirect purchaser.
- Complaint relied on contracts showing the midstream role of AmerisourceBergen and Amgen’s rebate program; Amgen’s rebates were structured to favor Aranesp purchases.
- This appeal questions whether Illinois Brick bars Warren General’s claim, and whether the direct-purchaser rule applies despite a middleman.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Warren General has antitrust standing under Illinois Brick. | Warren General is a direct purchaser due to direct relationship and being first injured. | Warren General is an indirect purchaser because purchase flows through AmerisourceBergen. | Hospital is an indirect purchaser; Illinois Brick stands. |
| Whether the execution of rebates and the purchasing mechanics reclassify Warren General as a direct purchaser. | Direct interactions with Amgen show direct-purchaser status. | Contractual mechanics show AmerisourceBergen as the purchaser intermediary. | Plaintiff remains indirect purchaser; mechanics do not negate intermediary role. |
| Whether Warren General can rely on being the first injured party in the chain to obtain standing. | Warren General bore the full overcharge and AmerisourceBergen was not injured. | Direct-purchaser rule and policy considerations require to withhold standing from indirect purchasers. | No standing; UtiliCorp and Illinois Brick policy support direct-purchaser rule. |
Key Cases Cited
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) (only direct purchasers may sue under §4; pass-on concerns and policy rationales)
- Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968) (direct purchaser rule origins; avoid pass-on complications)
- UtiliCorp United, Inc. v. Kansas, 497 U.S. 199 (1990) (no exceptions for regulated utilities; rule applies to avoid complex damages)
- Howard Hess Dental Laboratories v. Dentsply Int'l, Inc., 424 F.3d 363 (3d Cir. 2005) (indirect purchasers through dealers; middleman role preserves Illinois Brick standing)
- Delaware Valley Surgical Supply Inc. v. Johnson & Johnson, 523 F.3d 1116 (9th Cir. 2008) (hospital purchasing through GPOs; Illinois Brick direct-purchaser rule applied)
- Merican, Inc. v. Caterpillar Tractor Co., 713 F.2d 958 (3d Cir. 1983) (policy-based limitations on standing; direct purchaser focus)
- Recordex Serv., Inc., 80 F.3d 1314 (3d Cir. 1996) (illustrative of standing analyses in third circuit)
- Gulfstream III Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425 (3d Cir. 1993) (discusses direct purchaser status in specialized contexts)
- In re Mercedes-Benz Antitrust Litig., 364 F. Supp. 2d 468 (D.N.J. 2005) (distinguishable health-care contracting scenarios; not controlling here)