ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. Civ. No. 95-CV-6619)
Before: COWEN, ALITO, and GARTH, Circuit Judges
Appellant Barton & Pittinos, Inc. ("B&P") is a pharmaceutical marketing company. B&P entered into a contract with appellee SmithKline Beecham Corp. ("SKB") to market SKB's Engerix-B vaccine for hepatitis-B ("the vaccine") to nursing homes. Under the terms of the program, B&P would provide the nursing homes with information about the vaccine and would solicit orders. B&P would then pass the orders to General Injectables and Vaccines, Inc. ("GIV"), which would buy the vaccine from SKB and then resell it to the nursing homes, with B&P receiving a commission. When SKB, B&P, and GIV launched this program, SKB, it is alleged, was inundated with a flood of complaints from the consultant pharmacists who had traditionally supplied the nursing homes with SKB's vaccines and other pharmaceutical products. Assertedly bowing to pressure from the pharmacists, SKB terminated the program.
B&P brought this action against SKB, alleging that SKB conspired with the pharmacists to restrain competition in the nursing home market for the vaccine, in violation of Section(s) 1 of the Sherman Act, 15 U.S.C. Section(s) 1. B&P also asserted claims under state law for breach of contract and unjust enrichment. The district court granted summary judgment in favor of SKB on B&P's antitrust claim on the ground that B&P lacked standing to sue for its alleged injuries under the antitrust laws. B&P appealed. We hold that the injury alleged by B&P is not the type of injury that the antitrust laws were intended to prevent because B&P was not a competitor or a consumer in the market in which trade was allegedly restrained. Since B&P therefore cannot demonstrate "antitrust injury," it lacks standing under the antitrust laws. Accordingly, we affirm.
In 1991, B&P learned that the Occupational Safety and Health Administration would soon require employers whose employees might be exposed to blood-borne pathogens to educate their employees about the vaccine against hepatitis-B and to make the vaccine available to them free of charge. See 29 C.F.R. Section(s) 1910.1030 (1991). At the time, the only manufacturers of the vaccine were SKB and Merck & Co. Sensing an opportunity to profit from this regulatory mandate, B&P developed a plan to market the vaccine to nursing homes. SKB agreed to pay B&P a flat fee in exchange for B&P's preparation and distribution to the nursing homes of educational materials regarding the vaccine and the regulations. B&P performed the agreed-upon work and SKB compensated it according to the contract. The next step in the program was for B&P to telephone the nursing homes (under the trade name "The Medical Phone Company") to solicit orders for the vaccine. B&P contends that SKB agreed to pay it a commission of 7% on sales of the vaccine as compensation for these telemarketing services. *fn1
Because B&P, as a marketing company rather than a pharmaceutical company, lacked the required license to buy, possess, or sell the vaccine, the program did not call for B&P actually to distribute the vaccine to the nursing homes. Rather, B&P's function was to drum up demand for the vaccine, solicit orders from the nursing homes, and pass the orders along to GIV, a licensed medical supply house. GIV would fill the orders by purchasing the vaccine from SKB and would then resell the vaccine to the nursing homes.
The program debuted in January 1992. Before the commencement of this program, the nursing homes had traditionally obtained their vaccines and other pharmaceutical products from "consultant pharmacists." A nursing home's consultant pharmacist would educate nursing home administrators and staff about pharmaceutical products and regulatory requirements; assist the nursing home in storing its pharmaceuticals and in keeping the required records relating to their prescription; negotiate directly with pharmaceutical manufacturers regarding price and other terms of purchase of pharmaceutical products; and take orders from the nursing home, purchase the desired products from the manufacturers, and resell them to the nursing home. Because the SKB/B&P/GIV program promised economically advantageous terms to the nursing homes, the nursing homes accorded the program a favorable reception.
The nursing homes' gain, however, was the pharmacists' loss. Almost immediately, many individual pharmacists as well as pharmacist trade associations complained to SKB that the program bypassed and undercut them on price, and some threatened to boycott SKB products if SKB continued the program. *fn2 In March 1992, following meetings with pharmacist groups, SKB discontinued the program. SKB terminated the telemarketing and distribution program involving B&P and GIV and reverted to its prior practice of distributing the vaccine through consultant pharmacists. Even after SKB ended the ...