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As healthcare and antitrust enforcement by governmental agencies
increases, private parties are increasingly bringing antitrust and
state unfair competition claims.
On April 9, 2012, clinical laboratory Ameritox, Ltd. filed suit
against its competitor Millennium Laboratories, Inc. in the United
States District Court for the Middle District of Florida alleging
false advertising, unfair competition and unfair trade practices.
Specifically, Ameritox alleges that Millennium's nationwide
marketing strategy violates the Lanham Act, which protects
competition by prohibiting false or misleading advertising, and the
state unfair competition laws of Florida, California, and New
Hampshire.
Ameritox and Millennium are laboratories which market and
provide drug testing services to doctors who prescribe medications
for the treatment of chronic pain and addiction. These companies
provide unique laboratory tests, which permit physicians to
determine whether their patients are taking medication as
prescribed or are also taking other prescription and
non-prescription drugs.
Importantly, both companies work with doctors whose patients are
covered by Medicare and Medicaid. Ameritox's principal
allegation is that Millennium misled doctors about the payment of
Medicare co-pays and deductibles. Millennium allegedly provides
free training and distributes commercial advertisements to
physicians informing them of the means to code their medical tests
to increase their reimbursement rates. Ameritox alleges that such
coding practices are illegal and "misleadingly implied that
those Health Care Providers could implement this improper and
abusive scheme in good faith." This, among other actions, led
Ameritox to claim that Millennium is manipulating the market by
"effectively corrupt[ing] the Health Care Provider's
decision-making process by improperly introducing enormous
financial incentives that mislead Health Care Providers into
believing that it is lawful for them to accept illegal
inducements."
Ameritox also accuses Millennium of providing doctors financial
incentives, such as free supplies, which constitute illegal
kickbacks under the Federal Anti-Kickback Statute, and several
state anti-kickback statutes. Ironically, two years ago, Ameritox
settled its own False Claims Act lawsuit for $16.3 million. That
lawsuit accused Ameritox of engaging in similar conduct
(i.e., paying doctors illegal kickbacks in exchange for
their business, including their Medicare business).
Ameritox asked the court to enjoin Millennium's allegedly
illegal practices, award Ameritox all profits Millennium derived
from its allegedly illegal acts as well as treble damages, punitive
and exemplary damages, and attorneys' fees.
Ameritox's lawsuit begs the question of whether competitors
like Ameritox and Millennium can garner a competitive advantage
through private civil enforcement actions. Some companies have
found litigation of this type to be fruitful. In 2002, for example,
a Texas District Court awarded Healthpoint, Ltd. $6,349,030 in
damages under the Lanham Act and $3,174,515 in punitive damages,
under its common law unfair competition claim and found that Ethex
Corp. deliberately made false representations meant to damage
Healthpoint. In the increasingly competitive healthcare arena,
companies appear to be more willing to file private civil
enforcement actions as a means to protect their own business
interests, which may produce quicker action than if they were to
rely solely on governmental enforcement, which may take years.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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