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ECKERD COURT CHALLENGE TO MERCK SINGLE PRICE POLICY

Executive Summary

ECKERD COURT CHALLENGE TO MERCK SINGLE PRICE POLICY is scheduled for trial in Tampa Federal Court this September. Two Merck motions for summary judgment have been denied since the case was filed in 1982, and the antitrust action apparently will go to trial barring an out of court settlement. The more recent Merck motion for summary judgment was denied by the court in December 1985. Originally filed in April 1982, the Eckerd suit alleges that Merck's switch in July 1981 from a two-tier pricing structure for whsle. and retail accounts to a one-tier system "was designed to squeeze out competition at the whsle. level for Merck drugs," according to a March 1984 filing. Eckerd noted that prior to Merck's pricing change, the mfr.'s whsle. prices were generally about 5% lower than direct account prices. The chain said that until July 1981, it obtained Merck drugs through its two primary whslrs. at prices below Merck's direct account price. The suit alleges that as a result of the price structure change Eckerd must now purchase directly from Merck at "inflated prices." In seeking summary judgment, Merck contended that any injury Eckerd suffered was "not the type antitrust laws were designed to prevent," claiming that Eckerd wanted a return to the old pricing system whereby the chain's arrangement with its whslrs. gave it an advantage over smaller drugstores. Merck also argued that Eckerd had no basis to press the suit "because any injury it suffered is too remote from any antitrust violation."

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