Court: 'Elegant theory' not good enough

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Omnicare Inc. will need more than an elegant theory if it hopes to gain an antitrust ruling against UnitedHealth Group, an appellate court in Chicago recently ruled.

Omnicare had been contesting a decision that exonerated UnitedHealth Group Inc. and PacifiCare Health Systems Inc. of conspiring to depress Medicare payments to the nation's largest pharmacy company.

The appellate court upheld U.S. District Judge Rebecca Pallmeyer's 2009 decision that Omnicare failed to show UnitedHealth and PacifiCare conspired against Omnicare before they merged in 2005. Omnicare is the nation's largest institutional pharmacy.

The drug firm originally filed suit in 2006. After a merger, UnitedHealth dropped its reimbursement rate contract with Omnicare. UnitedHealth opted instead for a more lucrative accord PacifiCare had struck with Omnicare before the merger.

Omnicare's antitrust argument “is complex and compelling,” the appeals court acknowledged.

“But Omnicare cannot go to trial based on the elegance of its theory alone,” the judges wrote. They added that the pharmacy company's evidence didn't negate the “reasonable inference” that the defendants acted independently.

“The evidence in the record before us does not create a genuine issue of material fact as to the existence of an anticompetitive agreement among defendants,” the court concluded.

The ruling added that much of Omnicare's argument “is predicated on an impermissible flow of competitively sensitive information between United and PacifiCare.”

The justices noted that Omnicare's evidence supporting an illicit exchange “demonstrates only a circulation of generalized and averaged high-level pricing data, policed by outside counsel, that is more consistent with independent than collusive action.”

They added Omnicare's conspiracy theory is further impugned “when all the actions composing the alleged conspiracy are mapped sequentially.”

The case was originally filed in Covington, KY.
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