On Sept. 29, Colorado joined nine other states alongside the Federal Trade Commission in a lawsuit against pesticide makers Syngenta and Corteva for anti-competitive actions that harm farmers.
Filled in the U.S. District Court in the Middle District of North Carolina today, the complaint accuses Syngenta and Corteva of using loyalty programs with distributors to exclude generic options from the market. The complaint alleges the programs get distributors to sell Syngenta and Corteva products and oppose generics long after their patent expires. This inflates prices for farmers and consumers, and the complaint alleges, have cost farmers millions of dollars a year. The lawsuit also accuses Syngenta and Corteva of violating federal and state laws, according to the press release.
The complaint alleges Syngenta and Corteva undermined the system by paying incentive payments or rebates on one condition — that the distributor keeps its purchases of generic products below a threshold. Corteva and Syngenta have entered into program agreements with substantially all leading distributors in the U.S. This deprives producers of rival generic products, according to the complaint.
“Effective enforcement of the antitrust laws to protect farmers and to address concerns of inflated food prices is a priority,” Colorado Attorney General Phil Weiser, who filed the lawsuit, said in the press release. “Ensuring that dominant firms, including ones who previously benefited from patent protection, cannot maintain their market share through anticompetitive means is critical to protecting fair competition.”
FTC commissioners voted Sept. 29 to pursue the lawsuit. Including Colorado, the 10 states involved with the lawsuit include California, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Texas and Wisconsin.
Syngenta is based in Basel, Switzerland and is a subsidiary of Sinochem Holdings Corp. of China. Corteva is based in Indianapolis. Both groups are among the largest makers of crop protection products which are used on a wide variety of grains, vegetables, fruits and other crops.
Companies like Syngenta and Corteva can initially develop, patent and register active ingredients in their products and exploit their potential for years, to encourage innovation. After the protections expire, generic manufacturers may enter the market with products with the same active ingredients and toxicology and environmental impact study which usually leads to price reduction.
The FTC and state attorneys general ask the court to end the loyalty programs and grant equitable relief and attorney fees.