Three NC cities to benefit from $26.8M Cardinal Health settlement

Hospitals and clinics in Raleigh, Charlotte, and Greensboro that obtained radiopharmaceuticals from Cardinal Health Inc. between 2003 and 2008 stand to get some money back. Cardinal has agreed to pay $26.8 million to 25 markets where the Federal Trade Commission says it profited from monopoly practices.

The settlement represents the second largest monetary settlement the FTC has obtained in an antitrust case. The money will be deposited into a fund for distribution to injured customers. The order also includes provisions to prevent future violations and restore competition in six markets where Cardinal remains the dominant radiopharmacy.

Cardinal owns the nation’s largest chain of radiopharmacies which sell and distribute drugs known as low-energy radiopharmaceuticals. These radiopharmaceuticals are used by hospitals and clinics to diagnose a range of medical conditions, including heart disease. Due to the short half-life of the radioactive isotopes used in these drugs, hospital and clinics rely on radiopharmacies located nearby, resulting in highly localized markets.

According to the FTC’s complaint, through separate acquisitions in 2003 and 2004, Cardinal became the largest operator of radiopharmacies in the United States and the sole radiopharmacy operator in 25 metropolitan areas. Between 2003 and 2008, Cardinal employed various tactics to coerce and induce both BMS and GE to refuse to grant distribution rights for their respective HPA products to new competitors in the relevant markets.

As described in the complaint, Cardinal’s anticompetitive tactics included:

Cancelling, and threatening to cancel, Cardinal’s current or future purchases of the manufacturers’ radiopharmaceutical products;
Threatening to switch, and actually switching, customers from BMS’s Cardiolite to GE’s Myoview in the relevant markets to pressure BMS to abandon plans to license Cardiolite to new competitors;
Threatening to compete, and offering to forego competing, against BMS as a generic HPA manufacturer; and
Conditioning Cardinal’s future relationship with GE in the radiopharmaceutical

industry on GE’s refusal to grant Myoview distribution rights to new competitors in the relevant markets.

As a result of these tactics, the complaint alleges that Cardinal obtained de facto exclusive distribution rights to the only HPAs available on the market and prevented numerous potential entrants from gaining access to these radiopharmaceuticals.

The complaint charges that Cardinal violated the FTC Act by blocking or delaying competitive entry, and thereby monopolizing the sale and distribution of radiopharmaceuticals to hospitals and clinics in the following 25 markets:

1. Albany, New York

2. Birmingham, Alabama

3. Charlotte, North Carolina

4. Chattanooga, Tennessee

5. Columbia, South Carolina

6. Gadsden, Alabama

7. Gainesville, Florida

8. Greensboro, North Carolina

9. Huntington, West Virginia

10. Indianapolis, Indiana

11. Jackson, Mississippi

12. Jacksonville, Florida