Becton, Dickinson and Company (BDX)

[Enterprising Investor]

Becton Sued For Squeezing Out Rivals With Safer Syringes (7/17/15)

By Kelly Knaub

Law360, New York (July 17, 2015, 7:57 PM ET) -- Southeast Georgia Health System hit Becton Dickinson and Co. with a putative class action in Georgia federal court Friday, accusing the medical technology company of pushing competitors making safer needles out of the hypodermic syringes market.
The hospital alleges that despite federal law mandating practices to reduce dangerous needlestick injuries from conventional syringes since 2001 — injuries nurses experience more than 600,000 times annually, the suit says — New Jersey-based BD has slowly made only minor and ineffective changes to its conventional syringes, failing to reduce needlesticks and in some cases dramatically increasing them.

Southeast Georgia says that instead of competing and improving upon the technology put forth by Retractable Technologies Inc., which sells patented syringes that reduce needlesticks to a minimum and have been given the highest safety rating by a prominent testing laboratory, BD has suppressed competition and maintained its monopoly through a variety of schemes.

“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 says.

BD is suppressing competition through, for example, exclusionary bundled rebates that foreclose acute care providers from effective competitive access to safer syringes; penalty contracts and sole-source contracts that achieve the same end; theft of Retractable’s innovative technology to use it against Retractable and greatly impede its market entry; six years of competitive deception and false advertising; and the elimination of a significant safety rival by acquisition, according to the suit.

BD is also using many of the same schemes to obtain and maintain a monopoly in the market for the sale of IV catheters to acute care providers, the complaint claims.

Southeast Georgia’s complaint brings one count of syringe monopolization and one count of IV catheter monopolization, both brought under Section 2 of the Sherman Act.

The hospital said it seeks to represent proposed classes of thousands of acute care providers purchasing syringes and IV catheters under cost-plus distribution contracts.

In August 2013, BD struck a $22 million settlement with hospitals and pharmacies whose class actions accused the company of stifling competition from other hypodermic product makers.

And earlier this year, Retractable claimed it deserved $5.65 million in prejudgment interest in a false advertising and antitrust suit it brought against BD — on top of the $340 million it won — but a Texas federal judge instead granted BD’s bid to vacate the prejudgment interest.

A BD representative did not immediately return a request for comment.

Southeast Georgia is represented by Wallace E. Harrell and Mark D. Johnson of Gilbert Harrell Sumerford & Martin PC and R. Stephen Berry of Berry Law PLLC.

Counsel information for Becton Dickinson was not immediately available.

The case is Glynn-Brunswick Hospital Authority et al. v. Becton Dickinson and Co., case number 2:15-cv-00091, in the U.S. District Court for the Southern District of Georgia.

http://www.law360.com/articles/680556/becton-sued-for-squeezing-out-rivals-with-safer-syringes