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Differential Pricing of Pharmaceuticals and Retail Competition Under the Robinson-Patman Act

Published online by Cambridge University Press:  24 February 2021

Richard R. Abood
Richard R. Abood*
Affiliation:
University of Nebraska; School of Pharmacy, University of Wyoming; Wyoming Pharmaceutical Association
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Abstract

Emphasis on cost containment by third-party payors has intensified economic competition within the health care system, creating powerful market forces which retail pharmacists had not envisioned a few years ago. Hospitals and alternative delivery systems now sell prescription drugs in direct competition with retail pharmacists. These entities are able to purchase their pharmaceuticals from manufacturers at prices far below those of the retailers. Retail pharmacist plaintiffs allege that such activities violate the Robinson-Patman Act which prohibits price discrimination. Retail pharmacists have achieved landmark victories in decisions establishing that nonprofit, state and local governmental hospitals reselling pharmaceuticals in competition with retail pharmacies are not exempt from the Act. This Article demonstrates that despite these victories, plaintiffs will have difficulty proving an actual violation of the Act by manufacturers and hospitals. Plaintiffs must establish competitive injury as well as refute the meeting competition defense. Retail pharmacists might discover that the Robinson-Patman Act is not the ally they had hoped for; instead, they should concentrate on innovative alternatives which will allow them to compete in an evolving health care system.

Type
Articles
Information
American Journal of Law & Medicine , Volume 11 , Issue 3 , 1985 , pp. 293 - 317
Copyright
Copyright © American Society of Law, Medicine and Ethics and Boston University 2020

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Footnotes

*

Presented before the American Society for Pharmacy Law, San Antonio, Texas, February 18, 1985.

References

1 Rapid HMO Growth Forecast by Wall Street Report, 129 Drug Topics 21 (June 3, 1985); Abood, NCSPAE Report on Third Party Prescription Programs—1984-85 Update, National Council of State Pharmaceutical Association Executives (April 1985).

2 Manufacturer price lists obtained from certain HMOs, profit and nonprofit hospitals reveal that these entities in many instances can purchase drugs at discounted prices 10-90% less than what a retail pharmacy must pay. For example, a Kaiser Permanente price list shows a potassium drug available at $.80/100. A retail pharmacist would expect to pay $6.74/100 for the same product. See Drug Topics, Red Book, Annual Pharmacist’s Reference (1985), a book containing the average wholesale prices available to retail pharmacists.

3 See, e.g., Guerra v. Corcoran Dist. Hosp., No. CV-F-84-175 (E.D. Cal. filed April 2, 1984); Home Parenteral Care, Inc. v. Sisters of St. Joseph of Peace, No. 84-144 (D. Or. filed Feb. 3, 1984).

4 How NARD’s Conference Focused on Two ‘Critical’ Issues, 51 Pharmacy Times 83, 84 (July 1985).

5 15 U.S.C. §§ 13-13b, 21a (1982).

6 Id. at § 13(b).

7 15 U.S.C. § 13(c) (1982) (original version at ch. 283, 52 Stat. 446 (1938)).

8 Courts have not adequately described the traditional governmental functions that would be exempt from the proscriptions of Robinson-Patman. It has been suggested that “[i]f the Tenth Amendment protects certain state purchases from the Act’s limitations, such as for consumption in traditional governmental functions, those purchases must be protected on a case-by-case basis.” Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, 460 U.S. 150, 154 n.7 (1983). Any further elaboration exceeds the scope of this Article.

9 The term “for-profit entity” in this context can refer to either an entity operated for profit, or a nonprofit entity buying outside the scope of any exemption.

10 A spinoff problem associated with differential pricing, currently being addressed by Congress, may assist retail pharmacists in their efforts to eliminate differential pricing. Drug diversion and the bulk resale of prescription drugs occurs when entities purchase discriminatorily priced drugs from the manufacturers and subsequently resell the drugs to others in the distribution chain. Drug diversion schemes not only create inequitable pricing problems for competitors, but also cause distributed drugs to be misbranded, adulterated, and counterfeited, thus endangering the public health, safety and welfare.

The situation has become so serious that a Staff Report was prepared on drug diversion by the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce. Staff of Senate Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce, 99th Cong., 1st Sess., Prescription Drug Diversion and the American Consumer: What You Think You See May Not Be What You Get (Comm. Print 1985). The Subcommittee had its first hearings in early July 1985. Allegedly, the major culprits in these drug distribution schemes are nonprofit hospitals and other commercial nonprofits that resell the drugs primarily to brokers, wholesalers, and large pharmacy chains. Drug samples and differential pricing by manufacturers are primarily blamed for causing drug diversion.

The legality of the various schemes used in drug diversion is currently being scrutinized under the Robinson-Patman Act. Legality will likely depend on who is competing with whom, and who is being injured. Obviously, when the drugs become misbranded or adulterated because of repackaging, label changes, or improper storage, the Federal Food, Drug and Cosmetic Act is violated. 21 U.S.C. § 301 (1982) (original version at ch. 675, 52 Stat. 1040 (1938)). Regardless of the potential legality of certain drug diversion schemes under Robinson-Patman, retail pharmacists will have considerable input with Congress and the pharmaceutical manufacturers to achieve their goal of eliminating differential pricing.

11 15 U.S.C. § 13(a) (1982).

12 Clayton Act, ch. 323, § 7, 38 Stat. 730, 731-32 (1914) (current version at 15 U.S.C. § 14 (1982)). The Clayton Act was passed to correct perceived weaknesses in the Sherman Act, ch. 647, § 1, 26 Stat. 209 (1890) (current version at 15 U.S.C. § 1 (1982)).

13 The market share of chain outlet stores increased from 9% in 1926 to 25% in 1933. J. Palamountain, the Politics of Distribution 7 (1955).

14 A.B.A. Antitrust Section, Monograph No. 4, The Robinson-Patman Act: Policy and Law, Vol. I 8-9 (1980) [hereinafter cited as Policy and Law].

15 Id. at 9-10.

16 Id. at 10.

17 Id. at 11-12. Two major cases under the Clayton Act held that the Act’s proscriptions against price discrimination applied only to pricing practices injurious to primary line competition (i.e. seller-seller), and not secondary line competition (i.e. buyer-buyer). See Mennen Co. v. FTC, 288 F. 774 (2d Cir. 1923); National Biscuit Co. v. FTC, 299 F. 733 (2d Cir. 1924). Also, the Clayton Act was found to immunize any quantity discount, even if it constituted price discrimination. See Goodyear Tire & Rubber Co., 22 F.T.C. 232 (1936).

18 Hansen, , Robinson-Patman Law: A Review and Anaylsis, 51 Fordham L. Rev. 1113, 1122 (1983)Google Scholar.

19 Policy and Law, supra note 14, at 16.

20 Id. at 16-19.

21 Id. at 19. See generally Hansen, supra note 18, at 1114-17.

22 Policy and Law, supra note 14, Vol. II at 135.

23 Id.

24 15 U.S.C. § 13c (1982) (original version at ch. 283, 52 Stat. 446 (1938)).

25 425 U.S. 1 (1976).

26 Portland Retail Druggists Ass’n, Inc. v. Abbott Laboratories, No. 71-543 (D. Or. 1973) (oral opinion).

27 Portland Retail Druggists Ass’n, Inc. v. Abbott Laboratories, 501 F.2d 486, 488-89 (9th Cir. 1974). The Ninth Circuit decided that the drug purchases were not for the hospitals’ “own use,” as that term is used in § 13(c). Id.

28 Portland Retail Druggists Ass’n, Inc. v. Abbott Laboratories, 422 U.S. 1040 (1975).

29 Portland Retail Druggists Ass’n, 425 U.S. at 14.

30 Id.

31 Id. at 14-17.

32 Id. at 15-18.

33 See Price Discrimination, Hospital Pharmacy Competition, 105 Nard Journal 26 (Sept. 1983).

34 See 15 U.S.C. § 13(c) (1982). Since the Portland decision, hospitals have entered the home health care market, which may necessitate a further defining of the scope of the Nonprofit Institutions Act. Especially relevant will be the definition of the term “out-patient,” and at what point a hospital will be deemed to have exceeded its “own use” of a drug.

35 460 U.S. 150 (1983).

36 Id. at 151.

37 Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, No. CA 78-P-0870-S (N.D. Ala. 1978).

38 Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, 656 F.2d 92 (5th Cir. 1981).

39 Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, 455 U.S. 999 (1982).

40 Jefferson County Pharmaceutical Ass’n, 460 U.S. at 171.

41 Id. at 153-54. The Court did not elaborate on what it considered to be traditional governmental functions, except to suggest that “the plight of indigents is a traditional concern of state and local government.” Id. at 154 n.7.

42 743 F.2d 1388 (9th Cir. 1984).

43 Id. at 1390.

44 Id.

45 Id. at 1391.

46 Restatement (Second) of Trusts § 368 (1959), cited in De Modena, 743 F.2d at 1392.

47 De Modena, 743 F.2d at 1393.

48 De Modena v. Kaiser Found. Health Plan, Inc., 105 S. Ct. 1230 (1985).

49 Staff model HMO pharmacies also compete with independent practice association (IPA) HMOs, which may utilize the services of retail pharmacies. If the retail pharmacies cannot purchase the drugs at the same price as the staff model HMOs, the IPA will have difficulty being competitive.

50 See National Association of Retail Druggists, 107 News Letter 1-2 (March, 1985); American Pharmaceutical Association, 24 Apharmacy Weekly 33 (March, 1985).

51 15 U.S.C. § 13(a) (1982).

52 Id.

53 Id. at § 13(b).

54 Id. at § 13(a).

55 Evaluation Office, Bureau of Competition, Fed. Trade Comm’n, Preparing an Application to the Ftc for Robinson-Patman Complaint Concerning Alleged Price Discrimination 2 (March 4, 1980). The standards outlined in this information sheet are derived from the statutory language of Robinson-Patman as interpreted by judicial decisions. Private parties seeking advice on how to institute a Robinson-Patman proceeding are sent this short paper by the FTC. Telephone interview with Carl Hevener, Evaluation Office, Bureau of Competition, Fed. Trade Comm’n (Jan. 31, 1986).

56 15 U.S.C. § 13(a).

57 FT C v. Morton Salt Co., 334 U.S. 37 (1948).

58 Id.

59 363 U.S. 536, 549 (1960). But see FTC v. Borden Co., 383 U.S. 637 (1966) (court remanded the case to address the FTC’s determination that mere price difference was discrimination).

60 United Biscuit Co. of Am. v. FTC, 350 F.2d 615, 620 (7th Cir. 1965).

61 But see supra notes 52-54 and accompanying text.

62 15 U.S.C. § 13(a). the Act and cases recognize competitive injury based upon the distributive level of the competitor claiming the injury. Thus, a seller claiming injury because of discriminatory pricing by a competitive seller would allege a primary line injury. A purchaser claiming injury because a competing purchaser received discriminatory prices from the seller would allege a secondary line injury. These two levels of injury are the most common. A third line injury could occur involving customers of the seller’s customers; and theoretically there could also be fourth, fifth, etc. lines of injury if a particular distributive system utilized that many levels. Retail pharmacists as plaintiffs in an action against pharmaceutical manufacturers and competing hospitals would allege secondary line injury. See, e.g., supra note 3.

63 See, e.g., Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428 (1983); FTC v. Morton Salt Co., 334 U.S. 37 (1948).

64 Compare Falls City, 460 U.S. 428 (in an action for injunctive relief, plaintiff need only establish the probability of injury) with J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557 (1981) (in an action for monetary damages, plaintiff must prove actual injury).

65 Morton Salt, 334 U.S. at 46.

66 Id. See also Falls City, 460 U.S. at 434-35; Corn Prod. Ref. Co. v. FTC, 324 U.S. 726, 742 (1945).

67 Morton Salt, 334 U.S. at 42-44.

68 Id. at 45-46.

69 Id. at 49; see also American Motors Corp. v. FTC, 384 F.2d 247 (6th Cir. 1967).

70 See Falls City, 460 U.S. at 434-35; J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561-62 (1981).

71 350 F.2d 615 (7th Cir. 1965).

72 Id. at 621.

73 Id.

74 Id. at 622.

75 395 F.2d 517 (7th Cir. 1968).

76 Id. at 522.

77 Id.

78 460 U.S. 428 (1983).

79 Id. at 435.

80 Id. at 436. The Court noted that “[although concerns about the excessive market power of large purchasers were primarily responsible for passage of the Robinson-Patman Act,” the Act prohibits discrimination generally, regardless of the size of the favored competitor. Id. (quoting FTC v. Sun Oil Co., 371 U.S. 505, 522 (1963)).

81 325 F.2d 101 (7th Cir. 1963).

82 Id. at 106.

83 Letter from Bryce L. Harlow, Director, Office of Congressional Relations, FTC to Frederick S. Mayer, President, Pharmacists Planning Service, Inc. (June 11, 1984).

84 Letter from Karen G. Bokat, Bureau of Competition, FTC to Frederick S. Mayer, President, Pharmacists Planning Service, Inc. (Jan. 20, 1983).

85 Telephone interview with Frederick S. Mayer, President, Pharmacists Planning Service, Inc. (Feb. 13, 1986).

86 See, e.g., FTC v. Morton Salt Co., 334 U.S. 37 (1948); National Dairy Prod. Corp. v. FTC, 393 F.2d 517 (7th Cir. 1968); United Biscuit Co. of Am. v. FTC, 350 F.2d 615 (7th Cir. 1965).

87 See Hansen, supra note 18, at 1178.

88 Id. at 1180. The Justice Department historically has had little to do with the Act, having neither the inclination nor the expertise to involve itself. See id. at 1115-19.

89 Private plaintiffs are empowered to enforce the Act by 15 U.S.C. § 15 (1976 & Supp. V 1981).

90 Alioto, , The Role of the Private Antitrust Action in Antitrust Enforcement, 43 Antitrust L.J. 67 (1973)Google Scholar.

91 Office of the Secretary of the Dept. of Health, Education and Welfare, U.S. Task Force on Prescription Drugs—Final Report 7 (1969).

92 Early studies demonstrated that price was low on the list of pharmacy patronage motives. See Smith, Principles and Methods of Pharmacy Management 268-73 (1980).

93 More recent pharmacy patronage studies demonstrate that price has become more important to consumers. See id.

94 See id. at 9-29.

95 Bogdanich, Mail-Order Pharmacies’ Sales Advance, Provoking an Outcry From Drugstores, Wall St. J., Jan. 16, 1986, at 31, col. 4; Could Mail-Order Rx’s Capture Major Share of the Market?, American Druggist 28-31 (Dec. 1985).

96 Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976).

97 All fifty states now have laws authorizing pharmacists to substitute a generic drug for a brand name drug. The substitution laws vary from state to state. For example, in some states a pharmacist cannot substitute unless given specific authorization by the prescriber. See, e.g., Wyo. Stat. §§ 33-24-146—33-24-149 (1979). In other states the pharmacist may substitute unless given specific instructions by the prescriber not to substitute. See, e.g., Ark. Stat. Ann. § 72-1048 (1979).

98 The average gross margin of independent retail pharmacies in 1984 ranged from 30.7% to 35.6% depending upon geographic location. Eli Lilly & Co., Lilly Digest 28 (1985). The average gross margin for chain store pharmacies in 1984 ranged from 25.7% to 29.9% depending upon geographic location. Eli Lilly & Co., NACDS—Lilly Digest 20 (1985).

99 J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561-62 (1981); see also Klamath-Lake Pharm. v. Klamath Med. Serv. Bureau, 701 F.2d 1276 (9th Cir. 1983).

100 15 U.S.C. § 15 (1982).

101 J. Truett Payne, 451 U.S. at 560.

102 See Fowler Mfg. Co. v. Gorlick, 415 F.2d 1248, 1253 (1969).

103 J. Truett Payne, 451 U.S. at 557.

104 Id. at 562.

105 Chrysler Credit Corp. v. J. Truett Payne Co., 670 F.2d 575 (5th Cir. 1982).

106 Id. at 580 (quoting Littlejohn v. Shell Oil Co., 483 F.2d 1140, 1144 (5th Cir. 1973)).

107 J. Truett Payne, 670 F.2d at 580.

108 Id. at 582.

109 460 U.S. 428 (1983).

110 Id. at 435.

111 Id. at 437. The issue of proving the amount of injury and damages was never reached though, since the meeting competition defense exonerated the brewer. See infra notes 127-135 and accompanying text.

112 J. Truett Payne, 451 U.S. at 562 (quoting Perkins v. Standard Oil Co., 395 U.S. 642, 648 (1969)).

113 J. Truett Payne, 451 U.S. at 564.

114 395 F.2d 517, 522 (7th Cir. 1968).

115 J. Truett Payne, 451 U.S. 557.

116 Id. at 564 n.4 (quoting ICC v. United States, 289 U.S. 385, 390-91 (1933)).

117 Id. at 565 n.4.

118 Id. at 568; Bigelow v. RKO Pictures, Inc., 327 US. 251, 264 (1946); Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 566 (1931).

119 J. Truett Payne, 451 U.S. at 566-67 (citing Hetzel v. Baltimore & Ohio R. Co., 169 U.S. 26, 39 (1898)).

120 15 U.S.C. § 13(a) (1982).

121 Id.

122 15 U.S.C. § 13(b).

123 The changing conditions defense provides for price differential justification in situations involving an alteration in market conditions affecting the marketability of the product. Under this defense, courts have approved off-season discounts on sales of cars, see, e.g., Valley Plymouth v. Studebaker Packard Corp., 219 F. Supp. 608 (S.D. Cal. 1964), and Christmas ornaments, see, e.g., Willow Run Garden Shop, Inc. v. Mr. Christmas, Inc., 1973-2 Trade Cas. (CCH) ¶ 74,816 (D.N.J. 1973).

124 15 U.S.C. § 13(a).

125 Day, , Pricing and Discrimination, 44 Antitrust L.J. 312, 322 (1975)Google Scholar; 3 E. Kintner & J. Bauer, Federal Antitrust Law 366-69 (1983).

126 P. Areeda, Antitrust Analysis 895 (2d ed. 1974). Others are merely disenchanted with the cost justification defense, and regard it as ineffectual and nonexistent in practice. See Kintner & Bauer at 366-69.

127 15 U.S.C. § 13(b).

128 Standard Oil Co. v. FTC, 340 U.S. 231, 250 (1951); see also Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 438 (1983).

129 United States v. United States Gypsum Co., 438 U.S. 422, 451 (1978) (quoting FT C v. A.E. Staley Mfg. Co., 324 U.S. 746, 759-60 (1945)).

130 Falls City, 460 U.S. at 439 ; see also United States Gypsum Co., 438 U.S. at 451-53.

131 Continental Baking Co., 63 F.T.C. 2071, 2163 (1963); Falls City, 460 U.S. at 441 (quoting Continental Baking Co., 63 F.T.C. at 2163); see also United States Gypsum Co., 438 U.S. at 451.

132 United States Gypsum Co., 438 U.S. at 450-53.

133 See Great Atl. & Pac. Tea Co., Inc. v. FTC, 440 U.S. 69, 82-83 (1979); Kroger Co. v. FTC, 438 F.2d 1372, 1377 (6th Cir. 1971).

134 Sunshine Biscuits, Inc. v. FTC, 306 F.2d 48, 51-52 (7th Cir. 1962); Cadigan v. Texaco, Inc., 492 F.2d 383, 387 (9th Cir. 1974).

135 Falls City, 460 U.S. at 448.

136 Abbott Laboratories v. Portland Retail Druggists Ass’n, Inc., 425 U.S. 1 (1976); Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, 460 U.S. 150 (1983).

137 Although such a discussion exceeds the scope of this Article, questions exist as to the legality of a contract restricting the resale of drugs, since such a contract may constitute an agreement in restraint of trade. See 17 C.J.S. Contracts §§ 238-58 (1963). Such a contract may also violate the Sherman Antitrust Act, 15 U.S.C. § 1 (1982).

138 Portland Retail Druggists, 425 U.S. at 20-21.

139 Many hospitals employ drug formularies, a list of drugs which the hospital inventories for dispensation to patients. Physicians must conform their patient medication orders to those drugs inventoried by the hospital. the drugs included on the formulary are often selected by a panel of physicians and pharmacists based on such relative factors as therapeutic use and effectiveness, and cost.

140 See Falls City, 460 U.S. at 446; see also United States Gypsum Co., 438 U.S. at 454.

141 See Standard Oil Co. v. Brown, 238 F.2d 54, 58 (5th Cir. 1956); Continental Baking Co., 63 F.T.C. at 2121 (1963);. see also Falls City, 460 U.S. at 440-41.

142 Distinguishing between the two scenarios may depend upon whether the hospital pharmacy differentiates between the two types of purchases in its drugs inventory. If a differentiation cannot be made, a court most likely will treat the drugs as having been purchased under the hospital’s nonprofit status, and thus exceeding the hospital’s own use. See Abbott Laboratories v. Portland Retail Druggists Ass’n, Inc., 425 U.S. 1, 20 (1976).

143 15 U.S.C. § 13(f) (1982).

144 See Automatic Canteen Co. of Am. v. FTC, 346 U.S. 61, 80 (1953); see also Great Atl. & Pac. Tea Co., Inc. v. FTC, 440 U.S. 69, 79 n.12; Kroger Co. v. FTC, 438 F.2d 1372, 1377 (6th Cir. 1971).

145 Automatic Canteen, 346 U.S. at 70-71. the Court ruled that a buyer charged under section 2(f) is not liable if the prices he induces are either within the meeting competition defense of the seller, or not known by the buyer to be outside one of those defenses.

146 438 F.2d 1372 (6th Cir. 1971).

147 Id. at 1373.

148 Id. at 1376.

149 Id. at 1377.

150 Id. at 1378.

151 See id. at 1378-80.

152 440 U.S. 69 (1979).

153 Id. at 73.

154 557 F.2d 971 (2d Cir. 1977).

155 Great Atl., 440 U.S. at 79 n.12 (quoting Automatic Canteen Co. of Am. v. FTC, 346 U.S. at 79 (1953)).

156 Great Atl., 440 U.S. at 78-79. the Court stated that “[t]he clear language of section 2(f) states that a buyer can be liable only if he receives a price discrimination ‘prohibited by this section.’ If a seller has a valid meeting-competition defense, there is simply no prohibited price discrimination.” Id. at 78; see also Klamath-Lake Pharm. v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1283 (9th Cir. 1983).

157 Great Atl., 440 U.S. at 80.

158 Id. at 81 n.15. The court explicitly distinguished the present case from Kroger, a case involving a lying buyer. Id.

159 See, e.g., Abbott Laboratories v. Portland Retail Druggists Ass’n, Inc., 425 U.S. 1 (1976); Jefferson County Pharmaceutical Ass’n, Inc. v. Abbott Laboratories, 460 U.S. 150 (1983).

160 Clearly, a nonprofit hospital wishing to resell prescription drugs at retail should purchase the drugs as a for-profit entity. The hospital should also separately invoice the drugs so that they will not be confused with nonprofit purchases. Because of the competitive situation existing, it is unlikely that the prices would differ significantly between a for-profit and a non-profit purchase.

161 Buying group activity was initiated in California, Florida and Texas. More groups are expected to form in other states, some by the state pharmacy associations. See 34 Weekly Pharmacy Reports (April 29, 1985).

162 Telephone interview with George Anderson, Rocky Mountain Regional Pharmacy Services Director of PACE, a group purchasing company located in Sioux Falls, South Dakota, traditionally operating a purchasing program for hospitals and nursing homes, and recently for a retail pharmacy group. (Jan. 12, 1986).

163 Id.

164 Merrell Dow Pharmaceuticals has announced that it will decrease existing price differentials. See R.Ph.s Applaud Merrell Dow Moving to a One-price Policy, 129 Drug Topics 24 (June 3, 1985).

165 15 U.S.C. § 1 (1982). The Supreme Court has stated that the Robinson-Patman Act should be construed consistently with broader policies of antitrust law. See Great Atl. & Pac. Tea Co., Inc. v. FTC, 440 U.S. 69, 80 n.13 (citing United States v. United States Gypsum Co., 438 U.S. 422, 435 (1978) and Automatic Canteen Co. of Am. v. FTC, 346 U.S. 61, 74 (1953)). An exchange of price information by competitors is a concerted action which may be sufficient to establish a combination or conspiracy, the initial ingredient of a Sherman Act violation. See United States v. Container Corp., 393 U.S. 333, 335 (1969). See also Great Atl., 440 U.S. at 80. Any further discussion of this issue exceeds the scope of this Article. A more extensive examination of the relationship between Robinson-Patman and the Sherman Act in this context can be found in Hansen, supra note 18, at 1193-96.

166 Orphan drugs are drugs which are used to treat a specific disease suffered by relatively few people in society. Because so few consumers exist for such drugs, there is little economic incentive for manufacturers to bear the expenses of a new drug’s production and marketing. See Note, Orphan Drugs: The Question of Products Liability, 10 Am. J.L. & Med. 491 (1985).