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. Last Updated: 07/27/2016

Pepsi Plans For Medical Clinic Spark Legal Battle

The soft-drink and snack-food giant PepsiCo. Inc. announced Tuesday it plans to open an American-managed medical clinic in Moscow, embroiling it in a legal battle with the American Medical Center, which has accused Pepsi of industrial espionage. Pepsi's non-food arm, PepsiCo. World Trading Inc., plans to open the clinic on Aug. 1 with its two partners, Worldwide Medical Services Corp. and Columbia-Presbyterian Health Services of New York. The venture will target the growing market of expatriates and affluent Russians who can afford Western medical care, said Dr. Bruce Barron, president of Columbia- Presbyterian, at a press conference. The American Medical Center has held a near monopoly over the market for the past four years. The director of its parent company, Dennis Sokol, said in a telephone interview from Connecticut that the company gained a restraining order last Friday preventing Pepsi from "taking any steps to compete" with AMC. The new clinic, to be called Columbia-Presbyterian Moscow, would be of comparable size to AMC, which has eight doctors compared to Pepsi's planned seven. It is to be housed in an existing Russian clinic near Oktyabrskaya metro on Chetvortovo Dobryninsky Pereulok, which is run by the diplomatic services agency Glav UPDK, Barron said. Sokol said the American Medical Center's chief doctor, Miles Druckman, worked with representatives of Columbia-Presbyterian earlier this year in the belief that they were planning to set up a training program for Russian doctors. "They went to Miles under the disguise that they were setting up an educational program worldwide, and we gave them all this information," Sokol said. "What they were doing was getting all that information to set up an operation." He also accused PepsiCo of obtaining confidential materials about AMC from a Russian builder that had been slated to do renovations on a three-story building that the medical center plans to move to early next year. PepsiCo. denies all the charges. Christoph Adamsky, the vice president of PepsiCo. World Trading Inc., called the charges of corporate spying "baloney." Under the restraining order, filed in Craven County, North Carolina, where Pepsi is incorporated, the company, its agents, and "people acting in concert with it," are prevented from revealing AMC's trade secrets or soliciting any clients on the center's customer lists, including holding cocktail receptions for them. Taking a break from a cocktail reception for potential customers at the Metropol Hotel on Tuesday night, Adamsky said he believed the order was improperly served and addressed to the wrong parties. Both sides' lawyers disagreed as to whether a U.S.-issued restraining order could apply to activities occurring in Russia. "Our lawyer advised me after careful review that I should safely consider that it was not enforceable and that we should go ahead with what we planned to do," Adamsky said. "There are certain allegations contained in this document which we totally deny." The restraining order states that there is "probable cause" to believe that PepsiCo. : ? Possesses "trade secrets" including business plans, corporate customer lists and pricing information. ? Has "misappropriated" this information with the purpose of putting the AMC out of business. Adamsky said he believed there were enough customers for all companies to prosper, including a Canadian facility called M?diclub Moscow which opened this month. "My personal point of view on this is that there is no need for the AMC to get concerned, because we think the market is very big -- I would guess it's about 300,000 to 400,000 people," Adamsky said. He added that if the project worked, PepsiCo. World Trading planned to set up clinics in Eastern Europe and Asia. The Pepsi Columbia-Presbyterian venture would work on a membership basis, with additional fees for services, Barron said. It would also set up a training program in New York for Russian doctors from the Glav UPDK clinic and some Russian hospitals. It would include access to a medical database in the United States and would provide for telephone consultations with doctors in Columbia-Presbyterian's hospital. Those plans are nearly identical to ones the American Medical Center has been implementing for the past year with the Methodist Hospital System and Baylor Medical College in Houston, Texas. "We're flabbergasted," Sokol said, vowing to file suit. "We don't care how big Pepsi is, we're going to go after them."