Cardinal Health settles case over stress test agents for $26.8M

Cardinal Health will pay $26.8 million to settle an antitrust case involving its cardiac perfusion agents and other radiopharmaceuticals, according to the Federal Trade Commission (FTC).

The FTC claimed that Cardinal Health engaged in anticompetitive practices in 25 markets in the U.S., in violation of the FTC Act. The agency filed a complaint in March in the U.S. District Court Southern District of New York and announced the settlement on April 20.

The charges centered on radiopharmaceuticals used by hospitals and clinics for use in cardiac stress tests and other diagnostic procedures. Cardinal Health also serves neurology, oncology and nuclear medicine markets. The FTC charged that Cardinal Health built a monopoly for radioisotopes in 25 markets by blocking or delaying potential competitors. It argued that hospitals and clinics paid inflated prices for low-energy radiopharmaceutical as a result.

The FTC claimed that between 2003 and 2008 Cardinal Health “employed various tactics to coerce or induce” the then sole manufacturers of heart perfusion agents (HPAs) used in stress tests “to refuse to grant distribution rights for their HPA products to new competitors in the relevant markets.” That led to what the FTC called “de facto exclusive distribution rights.”

“By excluding potential rivals, Cardinal denied its customers the benefits of competition and profited from the monopoly prices it charged for all radiopharmaceuticals, including HPAs, in the relevant markets,” according to an FTC statement filed on April 17. “Importantly, there was no efficiency benefit or legitimate business justification for Cardinal simultaneously maintaining exclusive distribution rights to the only two HPAs then available in the relevant markets.”

The commission voted 3-2 to authorize the complaint and court order. The $26.8 million will be placed in a fund and distributed to customers who were affected during the period. The FTC wrote that this amount is the second largest monetary settlement it had ever received for an antitrust case.