* Companies accused of trying to squeeze out specialty
* Defendants threatened to raise prices on other products,
* Defendants control nearly 70 percent of market
By Jessica Dye
NEW YORK, Dec 5 Cardinal Health Inc and
Owens & Minor Inc were hit with a $200 million antitrust
lawsuit Wednesday by a specialty medical supply distributor that
accused the two U.S. companies of conspiring to wrest away
customers and keep it from expanding its market share.
The lawsuit was filed in Kansas federal court by Suture
Express Inc, a specialty medical supply distributor that sells
suture and endomechanical products to healthcare providers. In
the lawsuit, Suture Express alleged that Cardinal and Owens &
Minor exploited their dominance in the medical supply
distribution market to punish healthcare providers who buy
certain products from Suture Express.
Cardinal and Owens & Minor are both broad-based medical and
surgical supply distributors that carry a wide range of
products, in addition to suture and endomechanical products. The
lawsuit alleged that Cardinal and Owens each threatened their
customers with a prohibitive surcharge of as much as 5 percent
on the rest of their products, if the customers did not also
purchase their suture and endomechanical supplies from Cardinal
or Owens & Minor.
"This predatory pricing enhances defendants' market power,
raises barriers to entry and impedes the ability of Suture
Express to compete," the complaint said. Although Cardinal and
Owens & Minor compete in the same market, they "present a united
front against acute care providers' dealing with Suture
Express," the complaint said.
In doing so, healthcare providers have no option but to
purchase those products from Cardinal or Owens & Minor, raising
their costs and undermining Suture Express' customer base, the
The lawsuit is seeking $200 million from Cardinal and Owens
& Minor. Neither company could be immediately reached for
comment after regular business hours Wednesday.
Suture Express' chief executive, Brian Forsythe, said the
goal of the lawsuit was to "provide a level playing field so
that healthcare providers don't face a penalty for choosing
distributors like Suture Express."
Cardinal and Owens & Minor together control more than
two-thirds of the $22 billion acute care medical-surgical
distribution market in the United States, according to the
complaint. Suture and endomechanical products together make up
approximately 10 percent of all medical and surgical supplies
distributed in the United States to hospitals and other acute
care providers, the complaint said.
The case is Suture Express Inc v. Cardinal Health Inc and
Owens & Minor Inc, in the U.S. District Court for the District
of Kansas. Case number not immediately available.