example

Antitrust 4

Nsikakabasi Inyang

Antitrust: Abbott Laboratories v. Portland Retail Association

Hcad 650

University of Maryland University College

Godwin Odia

Running Head: Antitrust 1

· Title

The complete title and citation of the case is Abbott Laboratories v. Portland Retail Druggists Association, 425 U.S. 1 (1976), No. 74-1274. The case was on Argued December 16, 1975 and Decided March 24, 1976, 425 U.S. 1.

· Deciding Court

The court which decided this case is the United States Supreme court, the Court of appeal.

· Procedural history of the case

· Abbott Laboratories as an assignee of more than 60 commercial pharmacies sues petitioner manufacturer for selling drugs to certain hospitals, each of which had a pharmacy, at a prices lower than those charged to them in the District Court.

· The District Court ruled in favor of petitioner manufacturer

· The court of appeal vacated and remanded

· Abbott Laboratories and the 60 commercial pharmacies appealed

· The facts of the case

· Respondent together with the other hospitals made a purchasing contract with the petitioner manufacturer, where the manufacturer is supposed to sell drugs to the pharmacies under the contract at the same price.

· Such hospitals should be nonprofit making associations.

· The manufacturer was not supposed to discriminate on the prices of the drugs.

· Petitioner manufacture went against the contract and old drugs to certain hospitals at a lower price while selling the same drugs to the respondent and the 60 commercial pharmacies at a different price.

· Legal issue and the decision

· During the time of sale, the petitioners violate the Robinson-Patman Act, which makes it unlawful for one to engage in discrimination in price between different purchasers of like commodities where "the effect . . . may be substantially to lessen competition?"

· It was held that section 13c does not exempt all of the non-profit hospital’s drug purchasers from the Robinson-Patman Act, but the exempting language must be construed as applying to what reasonably may be regarded as use by the hospital in the sense that such use is part of and promotes the hospital's intended institutional operation in the care of its patients.

· Reasoning

· The court finds out that the petitioner manufacture was not supposed to sell the drugs at lower price to non-profit hospitals to lessen the competition

· The Court found out that there was no prove of exemption of the challenged sales under the Non-profit Institution Act, which, inter alia, excludes from the application of the Robinson-Patman Act nonprofit hospitals' "purchases of their supplies for their own use."

· Kind of decision

The decision of the court regarding the case was not unanimous. Majority of the Judges were satisfied with the decision, one of them concurred with the opinion, and another one filled a dissenting opinion and while another took no part in the consideration.

Justice Stewart and Brennan filed a dissenting opinion. "We may concede that, in these respects distribution by the hospitals can be justified as a proper and useful community service and thus can be regarded as a proper hospital function. It is not, however, the hospitals' 'own use.' . . . The purpose for which these supplies are purchased -- the use to which they are to be put -- is their consumption.

· Case Importance for healthcare administrators

Non-profit doctor's and other non-profit or beneficent social insurance associations might have the capacity to assert a restricted exclusion from the antitrust laws for the buy and resale of supplies for their own particular use under the Non-Profit Institutions Act.

All in all, the Robinson-Patman Act denies the contemporaneous deal in interstate business of commodities of evaluation and quality for use or resale inside the United States and its regions at various costs to various buyers, if the impact of such separation might be to damage rivalry generously. Congress ordered the Non-Profit Institutions Act to absolve from this preclusion the buying of supplies by certain non-benefit and altruistic organizations for their own utilization.

The impact of this exclusion has been to permit non-profit hospitals to buy pharmaceutical items and different supplies at lower costs than other buyers. A significant part of the case law and analysis with respect to the Act was concentrated on the last issue, i.e., when a buyer is for the "own utilization" of an organization. In any case, similarly imperative is the kind of organization that fits the bill for the exception. Both issues are examined beneath.