Hospital systems sue BD over alleged safety syringe, IV monopoly

A Georgia hospital system last week sued Becton Dickinson & Co. (NYSE:BDX) for allegedly seeking to monopolize the safety syringe and IV markets, seeking class-action status for acute care hospitals that bought the BD devices.

“Monopolist Becton, Dickinson and Company has systematically subverted innovation and competition for the sale of hypodermic syringes and IV catheters to United States hospitals (‘acute care providers’) for over a half century and monopolized the relevant markets in which they are sold,” the July 17 lawsuit alleges.

It was filed in the U.S. District Court for Southern Georgia by Brunswick, Ga.-based Southeast Georgia Health System, according to court documents.

Citing federal law mandating practices to reduce needlesticks, the hospital system accused BD of dragging its heels on creating safer syringes, saying it “has lethargically and unhelpfully made only minor and ineffective changes to its conventional syringes (by adding needle shields and recapping).”

“Nonetheless, Becton proclaims these as ‘safe,’ ‘safety,’ or ‘safety-engineered.’ They do not materially reduce needlesticks and in some cases increase them dramatically. Just as importantly, they also do not prevent reuse of contaminated syringes,” the lawsuit claims.

The suit also accuses Franklin Lakes, N.J.-based Becton of taking steps to thwart a smaller, more innovative rival: Retractable Technologies (NYSE:RVP), which won a series of legal victories  in a long patent infringement and anti-trust battle with BD.

“Rather than compete, and meet and improve upon Retractable’s innovation on the merits using its vast resources to protect the national health, Becton has taken the low road of the repetitive antitrust scofflaw,” the hospital system alleged in the suit. “Its integrated strategy to suppress competition and maintain its monopoly employs six schemes: (a) exclusionary bundled rebates (foreclosing acute care providers from effective competitive access to safer syringes), (b) penalty contracts and solesource contracts to the same end, (c) theft of Retractable’s innovative technology to use against it and greatly impede its market entry, (d) six years of competitive deception and false advertising, and (e) elimination of a significant safety rival by acquisition.”

The lawsuit seeks class action status for acute care providers who bought BD syringes from July 17, 2011, to the present under “cost-plus” distributor contracts “under which the distributor is contractually required to pass on all of Becton’s monopoly pricing.” It also seeks to establish a 2nd class of acute care providers who bought Becton IV catheters during the same time and under cost-plus contracts.

Southeast Georgia Health also wants a judgment of anti-trust violations, a permanent injunction barring further such violations, triple damages, legal costs and pre- and post-judgment interest “at the highest rate allowed by law.”

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