Dive Brief:
- Applied Medical Resources filed a lawsuit accusing Medtronic of “efforts to illegally block” competition in a surgical device market.
- The suit claims Medtronic “has conspired” to bundle devices for cutting tissue and sealing vessels “in a way that is unhealthy for competition, hospitals, and patients in need of medical treatment.”
- According to the filing, multiple hospitals have told Applied they can’t purchase its device because of their contracts with Medtronic and the rebates they generate. Medtronic called the claims “baseless” and vowed to defend itself against the lawsuit.
Dive Insight:
Applied competes with Medtronic, Johnson & Johnson’s Ethicon and Olympus in the bipolar energy device market. According to a lawsuit filed in the U.S. District Court for the Central District of California, Applied’s Voyant Intelligent Energy System “outperforms other advanced bipolar devices in numerous metrics and costs 15-20% less than competing devices.”
Despite those claimed benefits, Applied is a small player in the market. The lawsuit cites a report that says Medtronic has a 78.5% share of the $667 million advanced bipolar device market, with Ethicon and Olympus occupying the second and third spots, respectively. Applied has about 3% of the U.S. market.
According to the lawsuit, Medtronic’s dominance stems from “anticompetitive agreements” that require hospitals to buy most or all of their advanced bipolar devices from the company. Hospitals get a discount on other products such as monopolar devices and stapling if they buy bipolar devices from Medtronic, the lawsuit states, and therefore receive savings that the medtech biggest competitors can’t match.
Applied claims multiple hospitals including Cleveland Clinic and University of California health systems have told it they can’t purchase Voyant because of their contracts with Medtronic. The lawsuit states that switching to Voyant would save more than $1 million compared to Medtronic’s rival device, while the savings would be wiped out by the loss of a more than 20% rebate on bundled products.
The suit was filed just days after a California jury ordered Medtronic to pay $106.5 million to Colorado-based Colibri Heart Valve over charges of patent infringement.
Medtronic disputes Applied’s claims.
“We are proud to be a leader in this competitive and growing space. The claims are baseless and Medtronic will defend against the lawsuit filed by Applied Medical,” a spokesperson for Medtronic said in an email.
Updates with information about previous lawsuit against Medtronic.
