Just last April, Inmar released a statement announcing that it had taken over coupon processing services for Procter & Gamble brands. This development cements the existing diarchy Inmar and its supposed competitor but actual collaborator, Valassis Communications, enjoy over this industry. In the statement, Inmar asserts that P&G formerly handled its own coupons, but this has not always been the case. A 2006 10-K form Valassis filed with the SEC states that P&G accounted for over 10% of that company's income the previous year, indicating that P&G has merely shuttled its business between the two corporations instead of comprising a third major player in the coupon-clearing market.
In the same 10-K form, Valassis names Inmar as one of its main competitors, but this claim is plainly refuted by the business relations they openly sustain. In its capacity as the owner of RedPlum, a mailing distributing coupons held by various companies directly to consumers, Valassis openly and actively aids Inmar in disseminating its coupons. Clearly this is not the aggressive competition one would expect from two companies which jointly "control approximately ninety-five percent (95%) of the total vendor coupon redemptions" (Compl. §16, 15-4434 (JLL), Dist. NJ (1015)).
The pattern of monopolization does not stop there, however. Though Inmar's coupon redemption and product return business is its most visible enterprise to consumers, it is certainly not its only venture. It is actually the predominant figure in the pharmaceutical returns market as well, and our research into its practices indicates that the leverage it enjoys as a result of its prominence could have far-reaching consequences for citizens compelled to trust it with their health.
It was a minor incident, and never should have been the major controversy it turned into. In November of 2008, Johnson & Johnson and its affiliate, McNeil Consumer Healthcare, noticed that several lots of their product Motrin failed to satisfy their manufacturing standards and were defective. This news immediately followed a string of recalls of other popular Johnson & Johnson products, including widely used cold and allergy medicines. Presumably to avoid the negative publicity that would result from expanding the recall to include the faulty Motrin, Johnson & Johnson decided to keep their findings secret. To do this, they formed a plan to send operatives into retail stores posing as customers, who would then buy back as much Motrin as possible. However, consumers who had already bought the defective Motrin would not be notified in any way of the problems.
Johnson & Johnson then hired Inmar to carry out this clandestine design, rejecting bids from several companies to handle the recall openly. Inmar promptly mobilized its employees and contractors, instructing them:
"You should simply 'act' like a regular customer while making these purchases. THERE MUST BE NO MENTION OF THIS BEING A RECALL OF THE PRODUCT! If asked, simply state that your employer is checking the distribution chain of this product and needs to have some of it purchased for the project."
Approximately five thousand convenience stores were searched in this fashion. The first two hundred and fifty stores yielded 595 vials, but the actual number of defective Motrin remaining on the market was dramatically higher - in one state alone, seven hundred and eighty-seven packages remained missing even after Inmar's feeble attempts to rectify the situation.
The recall was finally made public in February of 2010, over a year after Johnson & Johnson became aware of the problem and over ten months after Inmar became involved in the cover-up. Congressional hearings, civil lawsuits and criminal prosecutions ensued, but though Johnson & Johnson was made to take responsibility for its misconduct, Inmar escaped any meaningful penalty.
Now, five years after the federal firestorm subsided, Inmar is still in the pharmaceutical returns business, a job mostly composed of disposing waste, juggling returned or expired merchandise, and managing recalls. On its website, it proudly boasts that it provides these services to twenty-four thousand retail pharmacies (out of approximately twenty-eight thousand in the country), giving it control over 86% of the market. As Inmar has proven in the past, this anticompetitive situation could prove injurious to consumers which may never have heard its name, but still entrust it with their well-being every time they purchase the simplest of medications.