These clauses are found primarily in pharmaceutical product licenses and are used to keep active drug ingredients out of the hands of generic manufacturers and price-cutters.
forms and sell to retail outlets, and would presumably lead to price reductions as the result of normal competitive forces.
[2]In addition to the Glaxo case, other antitrust cases in which U.S. courts have held the use of bulk-sale restrictions illegal under the antitrust laws include United States v. CIBA Geigy Corp.[3] In that case the Government challenged both sales of bulk drug chemical and manufacturing licenses each with both bulk-sales restrictions and limitations to marketing the drug in a specific combination with another drug (for example, Ciba's patented hydrochlorothiazide plus Carter's meprobamate).
The district court found: The proof in this case has shown a series of supply agreements which limit, in varying degrees, the range of uses to which the purchaser was entitled to put the vended material.
Although these contracts were reached in a vertical, supplier-purchaser, context, they, in fact, were designed to limit horizontal competition between CIBA and its vendees.