As healthcare and antitrust enforcement by governmental agencies increases, private parties are increasingly bringing antitrust and state unfair competition claims.

On April 9, 2012, clinical laboratory Ameritox, Ltd. filed suit against its competitor Millennium Laboratories, Inc. in the United States District Court for the Middle District of Florida alleging false advertising, unfair competition and unfair trade practices. Specifically, Ameritox alleges that Millennium's nationwide marketing strategy violates the Lanham Act, which protects competition by prohibiting false or misleading advertising, and the state unfair competition laws of Florida, California, and New Hampshire.

Ameritox and Millennium are laboratories which market and provide drug testing services to doctors who prescribe medications for the treatment of chronic pain and addiction. These companies provide unique laboratory tests, which permit physicians to determine whether their patients are taking medication as prescribed or are also taking other prescription and non-prescription drugs.

Importantly, both companies work with doctors whose patients are covered by Medicare and Medicaid. Ameritox's principal allegation is that Millennium misled doctors about the payment of Medicare co-pays and deductibles. Millennium allegedly provides free training and distributes commercial advertisements to physicians informing them of the means to code their medical tests to increase their reimbursement rates. Ameritox alleges that such coding practices are illegal and "misleadingly implied that those Health Care Providers could implement this improper and abusive scheme in good faith." This, among other actions, led Ameritox to claim that Millennium is manipulating the market by "effectively corrupt[ing] the Health Care Provider's decision-making process by improperly introducing enormous financial incentives that mislead Health Care Providers into believing that it is lawful for them to accept illegal inducements."

Ameritox also accuses Millennium of providing doctors financial incentives, such as free supplies, which constitute illegal kickbacks under the Federal Anti-Kickback Statute, and several state anti-kickback statutes. Ironically, two years ago, Ameritox settled its own False Claims Act lawsuit for $16.3 million. That lawsuit accused Ameritox of engaging in similar conduct (i.e., paying doctors illegal kickbacks in exchange for their business, including their Medicare business).

Ameritox asked the court to enjoin Millennium's allegedly illegal practices, award Ameritox all profits Millennium derived from its allegedly illegal acts as well as treble damages, punitive and exemplary damages, and attorneys' fees.

Ameritox's lawsuit begs the question of whether competitors like Ameritox and Millennium can garner a competitive advantage through private civil enforcement actions. Some companies have found litigation of this type to be fruitful. In 2002, for example, a Texas District Court awarded Healthpoint, Ltd. $6,349,030 in damages under the Lanham Act and $3,174,515 in punitive damages, under its common law unfair competition claim and found that Ethex Corp. deliberately made false representations meant to damage Healthpoint. In the increasingly competitive healthcare arena, companies appear to be more willing to file private civil enforcement actions as a means to protect their own business interests, which may produce quicker action than if they were to rely solely on governmental enforcement, which may take years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.