A federal jury in California has found that Medtronic unlawfully monopolised the market for blood-vessel sealing surgical devices and awarded US$382 million in damages to rival manufacturer Applied Medical Resources. (Reuters)
The verdict was delivered on Thursday by a jury in Santa Ana, which concluded that Medtronic violated US antitrust law through its commercial practices relating to its LigaSure device. According to counsel for Applied Medical, the jury found that Medtronic sold LigaSure below cost and bundled it with other products in a manner that restricted competition. The damages award could be subject to trebling by the court under US antitrust law.
The case concerns competition between Medtronic’s LigaSure device and Applied Medical’s competing Voyant product, both of which are used in surgical procedures to cut tissue and seal blood vessels.
Applied Medical alleged that Medtronic engaged in exclusionary pricing and contracting practices, including underpricing LigaSure and discouraging hospitals from purchasing rival products by linking discounts to the purchase of unrelated medical devices. The lawsuit also challenged Medtronic’s hospital contracts, arguing that they operated as de facto exclusive-dealing arrangements that foreclosed Applied Medical from the market.
Medtronic rejected the allegations at trial, arguing that its commitment contracts are not exclusive and do not oblige customers to purchase products at specified volumes. The company maintained that such contractual arrangements are standard practice in the medical device industry and that Applied Medical failed to present evidence that any hospital was prevented from purchasing competing devices.
In a statement following the verdict, Medtronic said it would appeal the decision, adding that surgeons continue to select the LigaSure device based on its performance relative to competing products.
The case highlights ongoing scrutiny of pricing, bundling and contracting practices in medical device markets, particularly where dominant suppliers are accused of using commercial arrangements to limit competitors’ access to hospital customers.