Case Studies:
Antitrust

Representative Clients

• Baker & Botts
• Baker Montague
• Bose McKinney
• Cooter, Mangold & Tompert
• Kudon Law Firm
• Patton Boggs
• Schiff, Hardin & Waite
• Wiley, Rein & Fielding

Hospital Mergers

eiden Associates has been retained to provide analysis and expert testimony across the entire spectrum of antitrust actions, including alleged monopolization, predatory pricing, price-fixing and price discrimination, exclusive contracts and tying requirements, franchise agreements, and the competitive impact of acquisitions and mergers. We review industry and market conditions, develop appropriate geographic market and product market definitions, review and summarize relevant portions of antitrust economics, and present findings on both liability and the extent of economic damages incurred, if any.

Hospital mergers have attracted significant regulatory attention during the past two decades, and single merger cases can prompt litigation involving many potentially affected parties. In one recent engagement, Heiden Associates was asked to evaluate the impact of a merger of two full-service hospitals in a metropolitan area on the market for hospital-based physician services (HPS). The plaintiff alleged that an exclusive contract for anesthesiology services at the two merged hospitals had material impaired her ability to practice in the area.

Heiden Associates developed expert testimony that showed the market for inpatient hospital services included community hospitals in several adjacent counties. These hospitals were not party to the exclusive contract and were staffed by competing provider groups and staff physicians. We also demonstrated that a significant share of the area’s residents, especially cardiology patients, travel to a nearby major metropolitan area for inpatient procedures. Another portion of the analysis centered on the national and local markets for anesthesiology services, and the testimony included both general information on the practice of anesthesiology and the specific practice profiles of leading anesthesiologists in the area. Our report concluded that the plaintiff’s practice was not damaged by the existence of the exclusive contract at the two merged hospitals and had, in fact, expanded and become more profitable since the merger took place.

Pharmaceutical Class Actions

eiden Associates has been called upon to develop analysis and expert testimony on both liability issues and estimation of damages for several class actions, including a number that involve restraints on competition between proprietary and generic versions of pharmaceutical products. Some of these class actions have arisen when prospective manufacturers of generic alternatives to still-patented medicines agree to delay or forego attempting to enter the market in exchange for compensation or special treatment from the patent holders. Courts have found that some of these settlement agreements have led to overcharges of several hundred million dollars.

In one recent case, Heiden Associates was asked to provide expert testimony to support the certification request for a prospective class of plaintiffs, including drug wholesalers, large chain stores, pharmacy benefit managers (PBMs), health care maintenance organizations (HMOs), and hospital networks, all of which were direct purchasers of a high-volume, high-profit antibiotic. Counsel for the patent holder had argued that each purchaser entered a unique contract with the manufacturer, and that each should have to demonstrate the impact of a prospective entrant’s agreement not to compete.

We reviewed academic research, government reports, and other sources and outlined a common framework suitable for determining the extent of the overcharges borne by each member of the prospective class. While the terms under which different entities purchased the drug varied, we were able to show that the extent of the overcharges incurred by each member of the prospective class could be determined using common data and analytical methods that would be more efficiently and fairly handled as a class action.