## Facts

- Patent ductus arteriosus (PDA) is a life-threatening heart condition primarily affecting premature, low-birth-weight infants; drug therapy is generally first-line treatment, with surgery used when drug therapy fails.
- Two FDA-approved injectable drugs treated PDA:
  - Indocin IV (indomethacin), off-patent and FDA-approved for PDA since 1985.
  - NeoProfen (ibuprofen lysine), patented and FDA-approved for PDA since 2006.
- The drugs had different active ingredients and side-effect profiles and were not bioequivalents.
- Lundbeck acquired rights to Indocin IV in 2005 and to NeoProfen in 2006 (before NeoProfen’s launch).
- After acquiring Indocin IV, Lundbeck sharply increased its price; Merck’s prior price was $77.77 per treatment, and by 2008 the price was $1,614.44 per treatment.
- Shortly after acquiring NeoProfen, Lundbeck substantially increased its price and launched it at $1,450 per treatment; its price later settled at $1,522.50.
- Until generic entry in 2010, Lundbeck controlled all FDA-approved PDA drugs.
- PDA drugs were administered in hospitals; neonatologists selected which drug to use.
- The district court credited testimony that neonatologists chose between Indocin IV and NeoProfen based on clinical considerations, generally without knowing or considering the drugs’ relative prices.

## Issues

1. Whether plaintiffs proved a relevant product market including both Indocin IV and NeoProfen by showing reasonable interchangeability and sufficient cross-elasticity of demand.
2. Whether the district court clearly erred in finding the drugs were not in the same product market, given evidence of large price increases and hospital purchasing practices.

## Decision

- The Eighth Circuit affirmed judgment for Lundbeck after a bench trial.
- The court held plaintiffs failed to carry their burden to prove Indocin IV and NeoProfen were in the same relevant product market.
- The court treated relevant market definition as a fact-intensive inquiry and found no clear error in the district court’s findings.
- Because relevant market proof was a necessary element of the asserted federal and state antitrust theories and related equitable claims, plaintiffs’ failure on market definition was dispositive.

## Legal Principles

- A plaintiff alleging monopolization or other antitrust violations must prove a relevant product market, commonly assessed by reasonable interchangeability and cross-elasticity of demand.
- For specialized prescription drugs, the “consumer” relevant to substitution analysis may be the prescribing physician when that actor controls product selection.
- Low responsiveness of prescribing choices to relative price changes supports a finding of low cross-elasticity and can defeat a single-market theory.
- Large price increases, standing alone, do not establish a relevant market; market definition requires evidence of actual or likely substitution in response to relative price changes.
- After a bench trial, appellate review of market-definition findings is for clear error, with deference to the trial court’s credibility determinations and weighing of record evidence.

## Conclusion

The Eighth Circuit upheld judgment for Lundbeck because plaintiffs did not prove that the two PDA drugs competed in the same antitrust product market, given evidence that neonatologists selected drugs based on clinical factors rather than price, resulting in insufficient proof of substitution and cross-elasticity of demand.


Fed. Trade Comm’n v. Lundbeck, Inc., 650 F.3d 1236 (8th Cir. 2011)