United States v. Charles Pfizer & Co., Inc.

United States v. Charles Pfizer & Co., Inc. was a major antitrust case brought by the U.S. Department of Justice in 1958 against Pfizer, American Cyanamid, Bristol Myers, and other drug manufacturers. The U.S. government charged Pfizer and American Cyanamid with price fixing in connection with tetracycline. ^[1] Despite the case reaching as high as the Supreme Court and ending in a divided court decision in 1972, other related litigation lasted until 1982 and the series of cases is often referred to as the “tetracycline litigation.”

United States v. Charles Pfizer & Co., Inc.
Court	United States Department of Justice
Full case name	Southern District Court of New York, United States District Court for the Eastern District of New York
Started	May 28, 1958
Decided	January 24, 1972
Docket nos.	Nos. 636-638, Dockets 32493-32495
Defendants	American Cyanamid, Pfizer, Bristol-Meyers
Plaintiff	United States Department of Justice
Holding
Government failing to prove the antitrust charges against Pfizer and other companies beyond a reasonable doubt

Background

The focal point of the case was the two companies’ settlement of an interference proceeding before the United States Patent and Trademark Office over the priority of their respective applications for tetracycline. Under the settlement, American Cyanamid, which had acquired Heyden Chemicals‘s pending tetracycline application, conceded the priority of Pfizer’s application, withdrew its own application and exchanged cross licenses with Pfizer. According to the indictment of American Cyanamid, Bristol Myers, Pfizer, and Cyanamid knew that tetracycline represented a threat to the continuation of their dominant positions and unreasonably high profits. To keep that threat in check, the indictment alleges, Cyanamid bought out Heyden's rights to the development and agreed to help Pfizer acquire the tetracycline patent. In return, Pfizer licensed Cyanamid to produce the drug and later involved Bristol-Myers into the case to quell any remaining court fights. ^[2]

The Federal Trade Commission found that the cross-license, combined with the fact that Pfizer had knowingly withheld information relevant to the patentability of tetracycline, constituted an attempt by Pfizer and American Cyanamid to share in an unlawful monopoly. ^{[3] [4]}

The government also sought to cancel the Pfizer patent on tetracycline, alleging fraud and the concealment of information that would have been relevant to the patent examiner. The federal government lost the final appeal of that case in 1982. ^[5]

See also

• Price fixing cases
• American Cyanamid

References

1. “Government: Dissent on the Wonder Drugs,” Aug. 11, 1958, and Pub Policy: Pricing Fixing.
2. “Public Policy: Antitrust and & Antibiotics, August 25, 1961.
3. Cacciapaglia and Rockman, “Proposed Drug Industry Antitrust Act--Patents, Pricing, and the Public “ 30 Geo. Wash. L. Rev. 875, 894 (1961-1962); Kennedy, “Patent and Antitrust Policy--Acquisition of Patents by Fraud or by Unfair or Deceptive Acts or Practices,” 35 George Washington Law Review 512, 531 (1966-1967) For an early discussion, see Costello, “The Tetracycline Conspiracy: Structure, Conduct and Performance in the Drug Industry,” Antitrust L. & Economic Rev. 12 (1967-1968)
4. State of North Carolina v. Chas Pfizer & Co Inc. 537 F. 2d 67 (4th Cir. 1976).
5. U.S. v. Pfizer,, 676 F.2d 51 (1982).