Pfizer subpoenaed to testify in DOJ's antitrust probe of saline shortages

Pfizer HQ
Pfizer has now acknowledged it has been ordered to testify before a federal grand jury convened by the Justice Department's Antitrust Division, which is looking into shortages of saline solution and possible price collusion by manufacturers.

Pfizer and ICU Medical, which recently bought the Hospira Infusion Systems business from Pfizer, both acknowledged on Wednesday that they have been caught up in the Justice Department’s investigation into possible price collusion in sales of saline solution and infusion equipment and have been called to testify before a federal grand jury.

The disclosures come on the heels of Baxter International's acknowledgement on Friday that it had been called to testify before the grand jury in the Eastern District of Pennsylvania in connection with an investigation by the DOJ’s Antitrust Division into saline sales, shortages and pricing. Baxter and Hospira, which Pfizer acquired in 2015 for $15 billion, reportedly control about 90% of the saline market.

ICU Medical reported the subpoena in a public filing on Wednesday, saying it has been ordered to provide documents about saline manufacturing and sales, as well as “communications with competitors.” ICU said the investigations related primarily to time periods before it bought the IV solutions business, which it acquired from Pfizer in February for $900 million.

Pfizer acknowledged it has also been subpoenaed when contacted by Reuters.

"Pfizer can confirm that it has received grand jury subpoenas in connection with an investigation by the U.S. Department of Justice, Antitrust Division and we are evaluating the requests," Pfizer said in an emailed statement today.

Saline is one of those products that hospitals turn to millions of times a week, but in 2013 shortages started to materialize for the ubiquitous product, leading hospitals to think twice about how they use their limited supplies. A bad flu season and product recalls because of manufacturing problems were said to have contributed to the diminished supplies.

The FDA tried to help resolve the problem by allowing companies to import saline from plants outside the U.S. that the FDA had not previously approved. But as shortages persisted, even as prices rose sharply, healthcare providers began to grow suspicious and complain to members of Congress, claiming suppliers were tying orders to agreements to buy infusion equipment.

In 2015, senators held hearings and called on the Federal Trade Commission to investigate "possible illegal collusion,” pointing to Hospira, Baxter and B. Braun as the three largest saline producers.

Their letter to the FTC said, "Price increases often help clear shortages, but in this case the shortage is still ongoing after nearly two years, raising questions about the incentives of the saline suppliers to solve this problem and about possible coordination among them."

The three companies all denied any collusion and pointed to the fact that they had ramped up production at their plants, sometimes running saline lines 24/7 to help resolve the shortages.