Idexx HQ

Photo by John Ewing

Idexx Laboratories is headquartered in Westbrook, Maine.

A lawsuit brought by a group of pet owners in the United States against veterinary diagnostics giant Idexx Laboratories alleging that it charges unlawfully high prices has been found by a judge to have no legal standing in most of the states in which they reside.

The class action, filed in 2022, alleges that Idexx's "anticompetitive behavior" causes pet owners to pay "artificially high" prices for point-of-care (POC) testing.

Who started the class action and how it was started is not outlined in the plaintiffs' 92-page complaint.

In a ruling Friday in the U.S. District Court in Maine, Judge Stacey Neumann confirmed the pet owners are located in 25 states and the District of Columbia but that only those plaintiffs in Minnesota, Missouri and North Carolina have legal standing to pursue the case.

The products in question include POC analyzers, which enable veterinarians to diagnose conditions in their own practices rather than sending samples offsite to a reference laboratory. Single-use rapid tests also are encompassed by the suit, as are "consumables" — components used in tests such as reagents and slides.

Although pet owners don't themselves buy POC products, the suit claims they are subject to "supracompetitive" pricing passed onto them by the veterinarians who are Idexx clients.

Idexx's share of revenue in the U.S. POC diagnostics market exceeds 70%, well ahead of its closest rivals, Heska (owned by Mars Inc.) and Zoetis, according to the complaint. The company, based in Maine, also offers a reference laboratory service.

Idexx sought to have the suit dismissed on the grounds that antitrust laws don't apply because veterinarians purchase its products, not pet owners.

Neumann last year dismissed the pet owners' claim pertaining to federal law, finding that they "are not direct or indirect purchasers" in the POC market. But she accepted they may have a case in individual states.

"States that explicitly reject federal limitations on indirect purchaser standing are characterized as 'repealer jurisdictions,' and these jurisdictions permit some indirect purchasers to recover for antitrust violations," she said in her latest ruling.

The ruling goes on to detail the case's merits in particular states.

For instance, California, the most populous state in the country, permits "indirect purchasers" to pursue antitrust violations, Neumann acknowledged. However, she wrote that no previous cases cited by the plaintiffs "demonstrate that a purchaser of professional services is an appropriate plaintiff to bring antitrust claims against an entity that supplied professionals with products used to perform that service."

By contrast, Neumann noted, the Supreme Court in Minnesota "counsels against a rigid market-participant requirement" in that state.

Attorneys for the plaintiffs declined to comment on the ruling. Idexx did not respond to a request for comment.

Idexx has been reprimanded by antitrust regulators in the past. In 2013, the Federal Trade Commission stopped the company from entering into exclusive, long-term sales contracts with distributors of POC products, deeming the contracts to be anticompetitive. Soon afterward, Idexx started selling the products directly to veterinary practices.

Assessing whether Idexx is leveraging its dominant market position to hike prices is complicated by the fact that prices for veterinary care more broadly have been rising in what, until recently, has been a high-inflation environment.