Medpricer.com, Inc. v. Becton, Dixon & Co., No. 3:13–cv–1545 (MPS)

CourtUnited States District Courts. 2nd Circuit. United States District Court (Connecticut)
Writing for the CourtMichael P. Shea, U.S.D.J.
Citation240 F.Supp.3d 263
Parties MEDPRICER.COM, INC., Plaintiff, v. BECTON, DIXON AND COMPANY, Defendant.
Docket NumberNo. 3:13–cv–1545 (MPS)
Decision Date06 March 2017

240 F.Supp.3d 263

MEDPRICER.COM, INC., Plaintiff,
v.
BECTON, DIXON AND COMPANY, Defendant.

No. 3:13–cv–1545 (MPS)

United States District Court, D. Connecticut.

Signed March 6, 2017


240 F.Supp.3d 264

Jonathan M. Shapiro, Shapiro Law Offices, LLC, Middletown, CT, for Plaintiff.

Charles D. Ray, James Emory Regan, McCarter & English, LLP, Hartford, CT, for Defendant.

MEMORANDUM OF DECISION

Michael P. Shea, U.S.D.J.

I. INTRODUCTION

This action arises out of a contract dispute between MedPricer.com, Inc. ("MedPricer"), a company that operates an online portal through which purchasers and suppliers of medical equipment can make and accept bids, and Becton, Dixon, and Company ("Becton"), a company that provides medical products, including safety needles and syringes. MedPricer brought suit for, inter alia , breach of contract, and

240 F.Supp.3d 265

Becton responded by alleging as an affirmative defense that the contract violated the federal Anti–Kickback Statute ("AKS"), 42 U.S.C. § 1320a–7b(b). The parties have filed cross-motions for summary judgment. For the reasons stated below, Defendant's Motion for Summary Judgment is GRANTED in part and DENIED without prejudice in part, and Plaintiff's Motion for Summary Judgment is DENIED without prejudice.

II. FACTS

The following facts are taken from the parties' Local Rule 56(a) Statements and the documents cited therein. See Defendant's Local Rule 56(a)(1) Statement, ECF No. 68; Plaintiffs' Local Rule 56(a)(2) Statement, ECF No. 81–2; Plaintiffs' Local Rule 56(a)(1) Statement, ECF No. 70–4; Defendant's Local Rule 56(a)(2) Statement, ECF No. 80–2. The facts are undisputed unless otherwise noted.

MedPricer operates a website that provides an online auction platform allowing buyers and sellers to conduct online negotiations ("Sourcing Events"), which include online requests for quotes ("RFQs"), i.e., the means to enter bids to supply services or products to health care organizations.1 (Defendant's Local Rule 56(a)(1) Statement ("Def.'s L.R. 56(a)(1) Stmt."), ECF No. 68 at ¶ 1–2; Plaintiffs' Local Rule 56(a)(2) Statement ("Pl.'s L.R. 56(a)(2) Stmt."), ECF No. 81–2 at ¶ 1–2.) MedPricer does not participate in the Sourcing Events directly, but facilitates negotiations between buyers and suppliers through its website. (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 4; "Pl.'s L.R. 56(a)(2) Stmt.", ECF No. 81–2 at ¶ 4.)

Hospitals and other healthcare service providers enter into Service Agreements with MedPricer to engage MedPricer as the exclusive provider of e-sourcing services. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 10; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 10.) Under the Service Agreement, MedPricer has no role in determining which suppliers are invited to participate in the Sourcing Event and which are ultimately awarded business from the Sourcing Event. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 8; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 8.) Rather, the hospitals determine which suppliers to invite to a Sourcing Event and MedPricer then sends invitations to those suppliers. (Plaintiffs' Local Rule 56(a)(1) Statement ("Pl.'s L.R. 56(a)(1) Stmt."), ECF No. 70–4 at ¶ 8; Defendant's Local Rule 56(a)(2) Statement ("Def.'s L.R. 56(a)(2) Stmt."), ECF No. 80–2 at ¶ 8.) MedPricer provides the online forum for the Sourcing Events, provides the forms on which the bids are made, and offers to answer questions about the bidding process. (ECF No. 69–6 at 10.)

Once a supplier is invited to a Sourcing Event, it must visit MedPricer's website, create an individual login, password, and member profile, and register as a supplier to participate in Sourcing Events and view specifications for a bid.2 (Def.'s L.R.

240 F.Supp.3d 266

56(a)(1) Stmt., ECF No. 68 at ¶ 6; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 6.) As part of the required registration process, the supplier must click a box indicating acceptance of an agreement with MedPricer (the "Contract"). (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 7; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 7.) Before accepting the Contract, a supplier has the opportunity to review the terms and conditions of the Contract. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 13; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 13.) After the supplier has registered, MedPricer emails the supplier with a copy of the Contract. (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 8; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 8.)

The Contract states that a fee of 1.5% of the value of the transaction shall be paid by a supplier "who participates in a Sourcing Event through MedPricer and is awarded business related to a Sourcing Event." (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 10; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 10.) The fee is volume based, rather than a flat fee. (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 13, 11; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 13, 11.) Even if the sale is completed after the Sourcing Event, or is concluded between the buyer and supplier on different terms than those set forth in the Sourcing Event, the supplier must still pay MedPricer the 1.5% fee. (Def.'s L.R. 56(a)(1) Stmt., ECF No. 68 at ¶ 14; Pl.'s L.R. 56(a)(2) Stmt., ECF No. 81–2 at ¶ 14.) The Contract also includes a term binding the supplier to any bid that it makes during a Sourcing Event. (ECF No. 69–3 at 7 ("A supplier may withdraw any bid during the course of the Sourcing Event. Any bids that are not withdrawn will be considered contractually binding.").) The Contract requires that winning suppliers provide MedPricer with monthly sales reports and payments for all business transacted as a result of the successful bid. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 39; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 39.)

Becton participated in three transactions on the MedPricer platform that are the subject of this lawsuit.3 On October 3, 2011, Becton accessed the MedPricer platform to participate in a Sourcing Event for Children's Hospital of Alabama (the "First Transaction"). (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 15; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 15.) Becton checked the box indicating that it accepted the terms of the Contract and was provided access to the Sourcing Event.4 (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 15; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 15.) On October 25, 2011, Becton participated in a Sourcing Event for Children's Hospital and submitted a bid to provide analyzers. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 17–18; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 17–18.) Following the Sourcing Event, Becton was awarded the Children's Hospital business. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 19; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 19.) Becton sold the

240 F.Supp.3d 267

analyzers to Children's Hospital for $28,900. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 20; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 20.) Under the Contract, MedPricer was entitled to 1.5% of the total volume of the sale, or $433.50. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 21–22; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 21–22.) MedPricer invoiced Becton for the fee, but Becton did not pay it. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 22; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 23.)

On May 21, 2012, Becton was invited to participate in Sourcing Events for Barnabas Health (the "Second Transaction" and "Third Transaction"). (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 23; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 23.) Becton accessed the MedPricer platform and was required to register again. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 24; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 24.) Becton registered by checking the box indicating acceptance of the Contract.5 (Id. ) Becton then contacted MedPricer and requested that it be permitted to make payments on a semi-annual rather than monthly basis as required by the Contract, and MedPricer agreed to allow payment semi-annually. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 27–28; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 27–28.) MedPricer allowed Becton access to its platform and Becton participated in a Sourcing Event and submitted bids to provide pre-filled syringes and safety syringes to Barnabas. (Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 30–32; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 30–32.) In submitting the bids, Becton included a comment stating:

[Becton]'s response to this Request for Quote and the pricing offered herein is subject to the understanding that [Becton] will not be required to pay any fees to MedAssets or any other GPO fee. The MedPricer fee is subject to continued discussion. In the event that [Becton] is required to pay any such fees, [Becton] reserves the right to modify the pricing offered herein.

(Pl.'s L.R. 56(a)(1) Stmt., ECF No. 70–4 at ¶ 33; Def.'s L.R. 56(a)(2) Stmt., ECF No. 80–2 at ¶ 33.) Following the bids, Becton and Barnabas reached an agreement for Becton to sell Barnabas pre-filled syringes (the Second Transaction) and safety...

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2 practice notes
  • In re Epipen Direct Purchaser Litig., File No. 20-cv-0827 (ECT/TNL)
    • United States
    • U.S. District Court — District of Minnesota
    • January 15, 2021
    ...pay for EpiPens, and that is enough. 42 U.S.C. § 1320a-7b(b)(1)(B); see MedPricer.com, Inc. v. Becton, Dixon & Co., 240 F. Supp. 3d 263, 272-73 (D. Conn. 2017).19c Third, Defendants argue that, even if Plaintiffs could otherwise plead a violation of the AKS, it doesn't matter because My......
  • 340B Mgmt., LLC v. RX Blue Star Solutions, LLC, No. 331 WDA 2017
    • United States
    • Pennsylvania Superior Court
    • December 19, 2017
    ...of that agreement. Nursing Home Consultants, Inc. , 926 F.Supp. at 843.In MedPricer.com, Inc. v. Becton, Di x on & Co. , 240 F.Supp.3d 263 (D. Conn. 2017).3 MedPricer.com, Inc. ("MedPricer"), operated a website that provided an online auction platform allowing buyers and selle......
2 cases
  • In re Epipen Direct Purchaser Litig., File No. 20-cv-0827 (ECT/TNL)
    • United States
    • U.S. District Court — District of Minnesota
    • January 15, 2021
    ...pay for EpiPens, and that is enough. 42 U.S.C. § 1320a-7b(b)(1)(B); see MedPricer.com, Inc. v. Becton, Dixon & Co., 240 F. Supp. 3d 263, 272-73 (D. Conn. 2017).19c Third, Defendants argue that, even if Plaintiffs could otherwise plead a violation of the AKS, it doesn't matter because My......
  • 340B Mgmt., LLC v. RX Blue Star Solutions, LLC, No. 331 WDA 2017
    • United States
    • Pennsylvania Superior Court
    • December 19, 2017
    ...of that agreement. Nursing Home Consultants, Inc. , 926 F.Supp. at 843.In MedPricer.com, Inc. v. Becton, Di x on & Co. , 240 F.Supp.3d 263 (D. Conn. 2017).3 MedPricer.com, Inc. ("MedPricer"), operated a website that provided an online auction platform allowing buyers and selle......

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