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drugs administered in the practice are subordinate to the
provision of the medical services.
We disagree with respondent's contention that "The transfer
of the drugs is clearly a commercial transaction" to the extent
he implies a commercial transaction is the conveyance of
merchandise. Given the nature of the services petitioner
provides and the substance of the service transactions, we are
convinced petitioner is not selling merchandise when it
administers chemotherapy drugs. The case of Abbott Labs. v.
Portland Retail Druggists Association, Inc., 425 U.S. 1 (1976),
parallels that conviction. There, the Supreme Court decided
whether drugs purchased by a nonprofit hospital at prices lower
than those charged commercial pharmacists were exempt from the
antiprice discrimination provisions of the Robinson-Patman
Antidiscrimination Act, ch. 592, 49 Stat. 1526 (1936), 15 U.S.C.
sec. 13(a) (1994). The exemption generally applies where the
nonprofit institution is purchasing the drugs for its "own use"
as opposed to for sale to patients. In siding with the
hospital's contention that it was exempt, the Court stated:
it seems to us to be very clear that a hospital's
purchase of pharmaceutical products that are dispensed
to and consumed by a patient on the hospital premises,
whether that patient is bedded, or is seen in the
emergency facility, or is only an outpatient, is a
purchase of supplies for the hospital's "own use," * *
*. In our view, * * * this is so clear that it needs
no further explication. [Abbot Labs. v. Portland
Retail Druggists Association, supra at 10-11; emphasis
added.]
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