31:— are, as the term is used in United States antitrust case law, clauses in patent licenses that provide that the licensee shall make and sell the licensed product only in "finished pharmaceutical form" or "dosage form" (such as tablets, capsules and vials—the form in which drugs are administered to humans), not in bulk. Bulk form is the form in which drug chemicals are manufactured by chemical or other processes. These clauses are found primarily in pharmaceutical product licenses and are used to keep active drug ingredients out of the hands of generic manufacturers and price-cutters.
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horizontal competition between CIBA and its vendees. Such agreements are more pernicious antitrust violations than simple vertical restraints, for, as a result of them, "cartel activity then co-exists with the attempt to vertically control the discretion of the independent businessman." Where it is shown, as it is here, that a vertically imposed restraint is intended to suppress horizontal competition, the court will treat the agreement as the equivalent of a horizontal restraint of trade.
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In that case the
Government challenged both sales of bulk drug chemical and manufacturing licenses each with both bulk-sales restrictions and limitations to marketing the drug in a specific combination with another drug (for example, Ciba's patented hydrochlorothiazide plus Carter's meprobamate). The
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However, the district court held that the hub-and-spoke conspiracy was rimless and therefore not proved. That is, the evidence did not show communication among the spokes or their awareness of one another's identities or acts. The court also rejected the whole claim that the manufacturing licenses
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The proof in this case has shown a series of supply agreements which limit, in varying degrees, the range of uses to which the purchaser was entitled to put the vended material. Although these contracts were reached in a vertical, supplier-purchaser, context, they, in fact, were designed to limit
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Bulk sales would create new competition among wholesalers, by enabling other companies to convert the bulk drug into dosage . . . forms and sell to retail outlets, and would presumably lead to price reductions as the result of normal competitive forces. There is, in fact, substantial
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In commercial law, the term "bulk sale" has a different meaning. It refers to a sale "not in the ordinary course of business" of much ("a major part") of a merchant's goods (such as more than half) in stock. Usually, the buyer must record notice of the transaction in order not to be liable to
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evidence in the record to the effect that other drug companies would not only have entered the market, had they been able to make bulk purchases, but also would have charged substantially lower wholesale prices for the dosage . . . forms of the drug.
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creditors of the seller whose claims might be defeated by the transfer of the seller's goods. The purpose of the law is to prevent fraudulent transfers. This field is generally governed by the
Uniform Commercial Code.
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Government had two principal legal theories: (1) each agreement was a "contract, combination, or conspiracy" in violation of
Sherman Act § 1; (2) the "network" of agreements amounted to a
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case, other antitrust cases in which U.S. courts have held the use of bulk-sale restrictions illegal under the antitrust laws include
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the reason why drug companies seek to prevent bulk sales:
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violated the
Sherman Act. It held them shielded by the
179:Dater & Price Co. v. Musselman Grocer Co.
102:The citations in this article are written in
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183:Martin Marietta Corp. v. N.J. Nat'l Bank
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83:General Talking Pictures doctrine
64:United States v. CIBA Geigy Corp.
46:United States v. Glaxo Group Ltd.
141:508 F. Supp. 1118 (D.N.J. 1976).
185:, 612 F.2d 745 (3d Cir. 1979).
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71:. The district court found:
211:United States antitrust law
194:See U.C.C. § 6-104 to -106.
41:United States Supreme Court
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25:finished-form limitations
168:508 F. Supp. at 1150-51.
159:508 F. Supp. at 1147-48.
69:hub-and-spoke conspiracy
181:, 217 U.S. 461 (1910);
29:dosage-form limitations
110:for more information.
106:style. Please see the
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17:Bulk-sale restrictions
150:508 F. Supp. at 1146.
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21:bulk-sale restraints
122:410 U.S. 52 (1973).
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98:References
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60:Glaxo
39:The
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