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                                                                                       Antitrust and MMCAP Contracts

<It is the responsibility of each Member to obtain advice from its legal counsel to determine how antitrust laws relate to the Member’s use of MMCAP-contracted products.

Purchases made by Members under MMCAP’s commodity contracts must comply with antitrust laws, including Robinson-Patman Act (15 U.S.C. 13) which makes it unlawful to engage in commerce that discriminates in price between different purchasers of like commodities where the effect may be to lessen competition. Since enacted, courts have held that the sale of pharmaceutical products to state and local governments for resale in competition with private pharmacies is not exempt from the requirements of the Robinson-Patman Act.  (Jefferson County Pharmaceutical Association v. Abbott Labs (460 U.S. 150 (1983))).  MMCAP Members have the burden to ensure their operations are not in violation of antitrust laws.

Robinson-Patman does not apply to jails, detention centers, correctional facilities, fire departments, and other government entities that do not provide services or sell goods to the general public, or for whose “consumers” there is no private competition.

Where a Member is engaging in the use or resale of goods in competition with private businesses there are two exceptions to the Robinson-Patman Act:

1.      Nonprofit Institutions Act (15 U.S.C. §13c)

This limited exception applies to purchases of supplies by “schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit."

The seminal case on this matter is Abbott Labs v. Portland Retail Druggists (425 U.S. 1 (1976)).  The United States Supreme Court defined the concept of the "own use" exemption from Robinson-Patman concluding it extended to groups such as inpatients, hospital employees, students, and dependents; but not to walk-in customers with no present connection with the hospital or its pharmacy.

2.      State Action Exemption Doctrine

The Concept is that federal antitrust law is not intended to restrain a state from activities directed by the state legislature.

An MMCAP manufacturer can refuse to provide products to any Member in circumstances where the manufacturer believes there is a violation of antitrust laws.  If a manufacturer refuses to provide products to a Member, it is the Member that must work with the manufacturer to establish that it is not in violation. Members are also expected to provide assurances of compliance with Robinson-Patman upon request.

MMCAP recommends that Members consult their legal counsel to discuss the applicability of antitrust laws to the Member’s operations and purchases.

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State of Minnesota, Office of State Procurement
www.mmd.admin.state.mn.us