United States v. Chas. Pfizer & Co.

United States v. Chas. Pfizer & Co.

Opinion

 [*33]  MOORE, Circuit Judge:

Chas. Pfizer & Co., Inc. (Pfizer), American Cyanamid Company (Cyanamid) and Bristol-Myers Company (Bristol) appeal from convictions after a jury trial for violations of the Sherman Act (15 U.S.C. §§ 1, 2). The indictment contained three counts, (I) "Combination and Conspiracy in Restraint of Trade"; (II) "Combination and Conspiracy to Monopolize"; and (III) "Monopolization." The defendants were found guilty on all three counts.

Two co-conspirators were named in the indictment, Olin Mathieson Chemical Corporation (Squibb) and The Upjohn Company (Upjohn). The chief executive officer of Pfizer, Cyanamid and Bristol respectively was also named as a defendant. Before trial the indictment was dismissed as to these individual defendants.

The indictment charged a conspiracy by defendants and co-conspirators to restrain trade in the broad spectrum antibiotic drug market. These drugs are enumerated more specifically later. In substance the alleged conspiratorial agreements were that:

(a) The manufacture of tetracycline be [**2]  confined to Pfizer, Cyanamid and Bristol.

(b) The sale of tetracycline products be confined to Pfizer, Cyanamid, Bristol, Upjohn and Squibb.

(c) The sale of bulk tetracycline be confined to Bristol and bulk tetracycline be sold by Bristol only to Upjohn and Squibb.

(d) The sale of broad spectrum antibiotic products by the defendant companies and the co-conspirator companies be at substantially identical and non-competitive prices.

The government's bill of particulars provides the frame of reference for its claims. As to Pfizer and Cyanamid, the conspiracy to violate antitrust laws began  [*34]  in November 1953 and as to Bristol, Squibb and Upjohn in December 1955 (BP para. 2, 16). The alleged illegal acts were (a) in November 1953 "the illegal cross-license and bulk sales arrangement between Pfizer and Cyanamid which initiated the conspiracy in November 1953" (BP para. 27(a)); (b) Pfizer's confining the tetracycline market to Pfizer and Cyanamid in January 1954; (c) an allegedly illegal agreement in November 1955 whereby Bristol deprived Squibb and Upjohn of their right to manufacture tetracycline; and (d) illegal arrangements between Pfizer and Bristol in December [**3]  1955 settling the Bristol-Pfizer patent litigation and depriving Squibb and Upjohn of the right to manufacture tetracycline. Squibb and Upjohn were named as co-conspirators -- not defendants. McKeen (Pfizer), Malcolm (Cyanamid) and Schwartz (Bristol) fixed pricing policies (e). These three individuals authorized the illegal acts (f).

The government's case, except for minor details, was constructed in large measure:

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