Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, September 20, 1994 TAG: 9409230021
SECTION: BUSINESS PAGE: C-8 EDITION: METRO
SOURCE: By MICHAEL STOWE STAFF WRITER
DATELINE: LENGTH: Medium
General Injectables & Vaccines Inc., a Bland County company that markets itself as the nation's largest distributor of flu vaccine, has filed a lawsuit accusing one of its suppliers of breaking a contract to deliver 750,000 vials of the vaccine.
General Injectables, known as GIV, said in the suit in U.S. District Court in Roanoke that Pennsylvania-based Connaught Laboratories Inc. is refusing to honor its agreement with GIV but does plan to sell the product to other customers.
"Unless GIV receives substantial delivery ... no later than Sept. 30, 1994, GIV will be unable to satisfy its obligations to its customers and will not have adequate inventory available to meet demand during the 1994-1995 flu season," the suit says.
The company is asking the court for a temporary restraining order requiring Connaught to deliver immediately 300,000 vials of its Fluzone vaccine to GIV. Connaught is a subsidiary of Rhone-Poulenc, a French company with sales last year of just over $14 billion.
The matter is so urgent that GIV arranged to file the suit in Roanoke on Sunday, a day the clerk's office usually isn't staffed. Attorneys for both companies met in the judge's chambers for several hours Monday.
Connaught's lawyers told U.S. District Judge James Turk they didn't have any of the flu vaccine in stock. Turk issued a temporary order saying that if the company manufactures any of the vaccine in the next two days, at least 50 percent of the product must be set aside for possible sale to GIV.
A full hearing on the temporary restraining order request is scheduled for 9 a.m. Wednesday in Abingdon.
GIV, at Bastian in Bland County, was started 11 years ago. According to the suit, the sale of flu vaccines to doctors and pharmacists is one of its two largest products based on sales volume.
GIV officials in court Monday declined to talk about the case or provide any general information about the company.
Here are a few details of the suit taken from the court records supplied by GIV:
GIV's agreement to purchase 750,000 vials of the vaccine from Connaught was made final April 26. During the second quarter of 1994, GIV tried to order more Fluzone, but Connaught said it couldn't meet the additional demand.
GIV then said it would buy the additional vaccine it needed from another company, and Connaught didn't object, the suit says.
GIV also claims to have information indicating that Connaught had difficulty manufacturing its flu vaccine in the summer, which forced it "to breach its obligations to GIV in order to sell Fluzone to other customers and GIV at a higher price."
On Sept. 9, a hand-delivered letter from Connaught accused GIV of breaking the Fluzone contract by buying flu vaccines from another company, according to the suit.
The letter told GIV that Connaught intended to honor the contract and would consider only new orders submitted by Sept. 19. Connaught would charge a higher price and would not guarantee quantities or delivery dates for the new orders, the suit said.
A spokeswoman reached at Connaught's offices in Swiftwater, Pa., declined to comment on the suit.
by CNB