Rochester Medical Corp. Inc., a maker of latex-free medical devices, is suing a group of large medical device manufacturers and distribution businesses, charging them with anti-competitive practices related to the market for anti-infection Foley catheters in Texas.
The suit against C.R. Bard Inc., Tyco International (U.S.) Inc. and a number of large group purchasing organizations was filed in mid-March in the U.S. District Court for the Eastern District of Texas.
The complaint alleges that C.R. Bard and Tyco, with the assistance of the GPOs-Novation L.L.C., VHA Inc., Premier Inc. and Premier Purchasing Partners L.P.-used financial leverage and other tactics to force hospitals and clinics to buy catheter products that are inferior in quality to Rochester's patented silicone catheter products, particularly its Release-NF Catheter.
``Plaintiff asserts that defendants combined or conspired to eliminate or lessen competition and to acquire and maintain monopoly power among hospitals and healthcare providers,'' Rochester Medical said in its original complaint.
The suit alleges C.R. Bard controls more than 75 percent of the $150 million national Foley catheter market and Tyco another 15 percent. For anti-infection/bacterial catheter products, C.R. Bard controls close to 100 percent of the market, the suit alleges.
Neither Rochester Medical CEO Anthony Conway nor representatives of C.R. Bard or Tyco would comment on case specifics.
The suit charges C.R. Bard, Tyco and the GPOs with making mutually beneficial deals that effectively lock out market competition.
``Defendant GPOs' true function in the medical device market is to deliver substantial market share to monopolistic medical device manufacturers...in exchange for substantial `administrative fees' and other forms of remuneration and benefits,'' the complaint said.
The suit alleges C.R. Bard and Tyco use illegal and anti-competitive practices such as product bundling, kickbacks, bribes and product disparagement to ensure large portions of business from the GPOs. The GPOs sometimes require their member hospitals to purchase up to 90 percent or more of their products through them to receive bulk purchase cost savings and avoid contractual sanctions and penalties, the suit claims.
The product disparagement charge relates partly to false statements Rochester Medical alleges the defendants knowingly made to Rochester Medical's customers and potential customers that there are no studies or scientific evidence demonstrating the effectiveness of the Release-NF catheter.
Rochester Medical cites on its Web site a clinical study supporting the effectiveness of the Release-NF catheter.
Rochester Medical alleges these practices have resulted not only in lost business for Rochester Medical-which claims to have lost contracts with hospitals-but in harm to hospitals and patients by forcing them to pay high prices for inferior products.
``Defendants' actions have decreased (the) quality of Foley catheter products, unreasonably restricted consumer and provider choice and access to safer, higher quality products...increased prices and resulted in harm to healthcare patients,'' the complaint said.