Life Science Compliance Update

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March 10, 2017

Sanofi Settles Vaccine Antitrust Dispute


Sanofi Pasteur Inc., has agreed to pay $61.5 million in a five-year long class action brought by doctors alleging that the drug company violated antitrust laws with contracts for its pediatric vaccines, according to an agreement filed in federal court in New Jersey in late January. Specifically, the plaintiffs claimed the drug company held a dominant position in five pediatric vaccine markets, including a complete monopoly with quadrivalent meningococcal vaccine Menactra from 2005 to February 2010, when a competitor was introduced. At that point, Sanofi began bundling Menactra with other pediatric vaccines and substantially increasing the prices. 

According to the suit, Sanofi customers who bought a certain percentage of all four pediatric vaccines received a “loyalty discount” that reduced prices back to where they had been prior to the entry of the Novartis’ vaccine onto the market. Customers who did not buy enough of the four vaccines allegedly paid much more, according to the suit.

The lawsuit class was composed for 25,000 physician practices, 1,000 hospitals, 2,000 pharmacies, and 100 wholesalers. The suit received class certification in September 2015. The class was defined as anyone who purchased Menactra directly from Sanofi or its subsidiaries such as VaxServe Inc. 

Buyers in exclusive contracts for Sanofi vaccine bundles faced a penalty if they used Menveo instead of Menactra, the suit claimed. The penalty—ranging from 15.8% to 34.5%—would then apply to all the Sanofi vaccines a particular customer bought. The vaccines Sanofi put in those bundles included its Hib vaccines Pentacel and ActHIB, "for which there are no reasonably adequate medical substitutes," the suit claimed.

Sanofi defended its bundled sales approach in court documents, however. The company's "contracting and pricing practices did not constitute anticompetitive bundling,” Sanofi said in a court filing. Instead, the bundles helped competition and “benefited consumers by, among other things, lowering vaccine prices.” Sanofi also argued that Novartis was “both a profitable and successful competitor.”

The class action, on the other hand, said the practice “unfairly” hurt Novartis’ ability to compete with its meningococcal entrant, according to the complaint.

Sanofi fought the case for years, and even filed a counterclaim, but finally agreed to pay $61.5 million (and abandon the counterclaim) to settle and wrap up the lawsuit. The counterclaim argued that the class “engaged in unlawful collective action through membership” in physician buying groups, “purportedly causing vaccine prices to fall below competitive levels.” A Sanofi spokesperson said the company “has vigorously denied and continues vigorously to deny the plaintiffs’ claims and any allegation of wrongdoing.” The settlement does not require Sanofi to admit any fault.

“Despite Sanofi’s strong defenses, [our company] recognizes that continued litigation is likely to be extraordinarily expensive and time-consuming and thus has agreed to enter into this Settlement Agreement to avoid the further expense, inconvenience, risk and distraction of burdensome and protracted litigation,” according to a statement by Sanofi.

The potential settlement comes in advance of a trial, and has yet to receive approval. 

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