Cardinal Health Inc. agreed to pay $26.8 million to settle U.S.
accusations that the drug distributor inflated the prices for
radiopharmaceutical drugs used to diagnose illnesses such as heart
disease.
Cardinal Health said that as part of the settlement, it didn't
admit or deny any wrongdoing and that it doesn't believe it
violated the law. According to the company, it voluntarily agreed
to the settlement to avoid the costs and inherent unpredictability
associated with litigation.
The company added that the settlement isn't expected to have a
material impact on its operations.
The Federal Trade Commission said the $26.8 million represents
the disgorgement of funds the agency alleged Cardinal Health
generated illegally from its trading practices. The money will be
deposited into a fund for impacted customers, the FTC said.
According to the FTC's complaint, Cardinal through separate
acquisitions in 2003 and 2004 became the largest operator of
radiopharmacies in the U.S. and the sole radiopharmacy operator in
25 metropolitan areas.
The FTC had alleged that from 2003 to 2008, Cardinal employed
various tactics to coerce and induce both Bristol-Myers Squibb Co.
and General Electric Co. to refuse to grant distribution rights for
their respective heart perfusion agents used in heart stress tests
to new competitors in those markets. Bristol and GE at the time
were the sole U.S. producers of HPAs, according to the FTC.
The accord also includes measures to prevent Cardinal from
entering simultaneous deals with manufacturers of the same
radiopharmaceutical product or from using coercion or retaliation
to obtain effective exclusivity. It also includes provisions to
spur competition in six markets where Cardinal continues to operate
the sole or dominant radiopharmacy and requires the company to
establish an antitrust compliance program for the radiopharmacy
unit.
Write to Tess Stynes at tess.stynes@wsj.com
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