Idexx Veterinary Diagnostic Testing Products Antitrust Class Action

Idexx Laboratories, Inc. and Idexx Distribution, Inc. make components for veterinary point-of-care (POC) diagnostic laboratory tests, including analyzers, consumables, and single-use rapid tests, all of which allow animals to be tested and treated immediately, in a single vet visit. The complaint for this antitrust class action alleges that Idexx has violated antitrust laws maintain its more than 70% share of the market for these items.

The class for this action is all persons and entities in Arizona, California, the District of Columbia, Florida, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Mighigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin who indirectly bought, paid for, or provided reimbursement for some or all of the purchase price of Idexx POC analyzers, consumables, or single-use rapid test kits for companion animals, other than for resale, at any time between July 26, 2018 and the time the anticompetitive effects of Idexx’s conduct end.

The complaint alleges that the POC tests “are critical in … allowing veterinary practices to test, diagnose, and treat certain conditions … during a single office visit, and they are often used when patients require surgery or other emergency intervention.”

According to the complaint, Idexx has gained and maintained its position “through illegal long-term exclusive agreements with veterinary product distributors to block rivals from competing … by cutting them off from distributors, which, prior to 2013, were the primary means of selling POC Diagnostic Products to thousands of small veterinary practices around the country.”

The Federal Trade Commission (FTC) intervened, with a February 2013 order, telling Idexx to end its exclusive agreements with certain distributors, make future agreements non-exclusive, and for only two years, with one-year renewals, and also forbidding the company from withholding products from distributors or retaliating against them for distributing rival products.

Instead of this, the complaint alleges, “Idexx upended its entire distribution network—cutting loose the distributors it previously had relied on—in order to maintain exclusive restraints … without violating the letter of the FTC’s Order.” Instead of locking in distributors, the complaint alleges, Idexx locked in veterinary practices, using long-term exclusive agreements with them to cut out competition.

According to the complaint, its contracts with vets begin with a term of six years, with purchase requirements and “disloyalty” penalties, with automatic renewal provisions.

When vets fall behind in the purchase requirements, the complaint claims, Idexx “leverage[s] that indebtedness into even greater customer lock-in by allowing payments in arrears to be extended over a longer period in exchange for the practices’ agreement to extend the terms of their exclusive Idexx contracts time and again.” The complaint alleges that the vet practices find that they are unable ever to terminate the agreements.

In this way, the complaint alleges, the company was able to maintain its monopoly and “impose supracompetitive prices” for its testing products on vets, who then pass these prices on to pet owners.

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, Antitrust, Collusion and Price Fixing