The U.S. Federal Trade Commission said today that Cardinal Health (NYSE:CAH) agreed to disgorge nearly $27 million to settle charges that it exercised an illegal monopoly on low-energy radiopharmaceuticals.
The $26.8 million deal is the FTC’s 2nd-largest anti-trust settlement ever, the agency said.
"We have reason to believe that Cardinal, by preventing other radiopharmacies from entering its markets, was able to deny customers the benefits of competition and reap monopoly profits from the sale of radiopharmaceuticals for a sustained period of years," FTC chairwoman Edith Ramirez said in prepared remarks. "In addition to obtaining important injunctive relief to restore lost competition and prevent future misconduct, the settlement ensures that Cardinal disgorges the monopoly profits it obtained and that affected customers get relief."
The anti-monopoly regulator alleged that Cardinal Health used its power as the largest radiopharmacy operator to "coerce and induce" the top producers of heart perfusion agents, Bristol-Myers Squibb (NYSE:BMY) and GE (NYSE:GE) to refuse distribution to Cardinal Health’s competitors in certain markets.
The FTC alleged that the anti-competitive tactics included cancelling or threatening to cancel purchases, switching customers from BMY’s Cardiolite to GE’s Myoview "to pressure BMS to abandon plans to license Cardiolite to new competitors," and "threatening to compete, and offering to forego competing, against BMS as a generic HPA manufacturer."
Cardinal Health is also accused of conditioning its relationship with GE on GE refusing to grant distribution rights to new competitors, the FTC alleged.
The markets Cardinal Health allegedly monopolized are:
Albany, N.Y.; Birmingham and Gadsden, Ala.; Charlotte and Raleigh, N.C.; Nashville, Chattanooga and Knoxville, Tenn.; Columbia, S.C., Jacksonville and Gainesville, Fla.; Greensboro, N.C.; Huntington, W.Va.; Indianapolis; Jackson, Miss.; Lexington and Louisville, Ky.; Little Rock, Ark.; Omaha/Lincoln, Neb.; Orange, Texas; Richmond, Va.; Spokane; Tulsa, Okla.; Wichita, Kan; and Springfield, Mo.