Lawyers for Pemiscot Memorial Hospital, which services several counties in south-east Missouri, allege CSL and Baxter had illegal agreements to restrict supply and push up prices through co-ordinating their individual output.
It comes one month after the nightmare of CSL’s failed $US3.1 billion ($A3.9 billion) takeover bid for Talecris Therapeutics and allegations of market manipulation used at the time by the US Federal Trade Commission to block the deal.
The hospital is relying heavily on the statements and findings of the FTC in June that claimed that CSL, Talecris and Baxter operated as a “tight oligopoly” and had learnt they could maximise profits if each company did its part to pull back on supply to avoid driving prices lower.
In documents lodged overnight with the Eastern District of Pennsylvania, lawyers argue there may be thousands of class members that suffered losses from inflated prices. They have asked the court for a jury trial.
Pemiscot Memorial’s complaint seeks to represent US buyers of blood plasma proteins from October 1, 2004, to the present.
The complaint is also seeking unspecified damages.
A spokeswoman for CSL said the company would vigorously defend the court action and that the claims were baseless. She also downplayed the validity of the original damning statements made by the FTC that had led to the class action suit.
“Public statements by the FTC were designed to ensure that the merger did not go ahead; there is no legal basis to suppose any wrongdoing on the part of CSL.”
Shares in Baxter rose 3.1 per cent in US trade after the lawsuit was made public. CSL shares fell 25¢ yesterday to close at $29.86.
Market rigging allegations against CSL and its chief competitors were first made public in June when CSL decided to fight a move by the FTC to block its takeover of Talecris.
In court documents the FTC said companies such as CSL closely monitored each other, collecting and cataloguing competitive information to ensure all engaged in desired behaviour.
“CSL and Baxter, in particular, have focused on preventing oversupply of IVIG (intravenous immunoglobulin) and plasma,” said the FTC.
“Baxter and CSL have developed sophisticated oligopoly models to estimate and predict changes in supply and demand.
“Firms also engage in signalling — i.e., intentional sharing of competitive information for purposes of securing accommodating reactions from other firms.”
Lawyers for Pemiscot Memorial Hospital have repeated these claims in its court files lodged in the Philadelphia federal court. “Plaintiff alleges that defendants conspired, combined or contracted to restrict output and to fix, raise, maintain or stabilise the prices of blood plasma proteins that they sold to (the) plaintiff and the other class members during the class period,” the filings say.
They said that because of this conspiracy, blood plasma prices were higher than they otherwise would have been.
“The restriction of supply and increase in prices was not the result of natural market forces. Rather, they were caused by defendants’ conspiracy, which defendants formed in response to the excess supply that occurred earlier in the decade and that defendants did not want to experience again.”
Lawyers said CSL and Baxter had the opportunity to progress their conspiracy at trade association meetings, where high-level executives from both companies met to discuss industry trends. Eli Greenblat