Bundled discounts as potential anti-competitive exclusive dealing arrangements 

Regeneron Pharmaceuticals Inc. v. Amgen Inc., the District Court in Delaware dismissed Amgen's MSJ 

The ruling highlights that bundled discounts and exclusive rebate contracts, particularly among dominant pharmaceutical companies, will face close scrutiny when they significantly hinder competitors from entering the market.


Bundled discounts are usually seen as pro-competitive, benefitting buyers via lower prices and efficiencies. However, under certain circumstances, they can be exclusionary and violate antitrust laws. Where bundled discounts tie up substantial market share, particularly with customers who would otherwise consider rival suppliers, they can stifle competition and raise antitrust concerns. While courts recognize legitimate efficiency justifications (lower costs, improved logistics), discounts that exceed reasonable cost savings and are structured to maximize exclusion may be challenged under antitrust statutes.


Requirements

  • Market Power Requirement (foreclosure concerns arise primarily when the bundling firm holds significant market power in at least one of the products in the bundle);
  • Discount-Attribution Test (the test allocates the entire bundle's discount to the competitive product and asks if the resulting price falls below the defendant's incremental cost. If so, and if an equally efficient competitor cannot match, the arrangement may be deemed exclusionary and anticompetitive).


Ruling

On April 10, 2025, the federal court denied Amgen’s motion for summary judgment. The court found that Regeneron presented enough evidence for its antitrust and tortious interference claims to proceed to trial and that key factual disputes required jury consideration


The court determined there were unresolved factual questions regarding:

  • Whether Amgen’s bundled discounts restricted Regeneron’s market access due to Regeneron's less diverse product portfolio.
  • Whether Amgen’s rebate contracts with pharmacy benefit managers (PBMs) amounted to de facto exclusive dealing that substantially foreclosed Regeneron from the market.
  • Whether Amgen’s pricing in certain portions of the market fell below cost under the "price-cost" test and whether recoupment was possible


Comment

The court cited precedent supporting the view that bundled discount practices and rebate arrangements could constitute actionable anticompetitive conduct if they result in market foreclosure (LePage’s Inc. v. 3M; ZF Meritor, LLC v. Eaton Corp.) The Cascade Health Solutions v. PeaceHealth test was referenced for below-cost pricing in bundled arrangements. The standard in Cascade makes the defendant's bundled discounts legal unless the “attributed” price of the competitive product is below the defendants incremental cost and the discounts have the potential to exclude a hypothetical equally efficient producer of the competitive product.


This ruling underscores that bundled discounts and exclusive rebate contracts, especially among dominant pharmaceutical companies, will be closely scrutinized when they may substantially foreclose competitors from the market. The case highlights increased litigation risk for pharmaceutical manufacturers whose PBM contracting practices leverage dominant drugs to secure exclusivity or preferred placement in formularies