A California court has ordered Medtronic pay surgical device rival Applied Medical almost $382m in damages after determining that the medtech giant engaged in monopolistic conduct within the bipolar electrosurgical devices market.
Applied Medical filed a lawsuit in February 2023 alleging that Medtronic and certain hospital group purchasing organisations (GPO) had contracts in place favouring the source of procurement. The lawsuit alleged that the contracts defined Medtronic as the GPOs’ ‘sole source’ of advanced bipolar electrosurgical devices, namely the company’s LigaSure device for cutting tissue and fusing blood vessels during laparoscopic surgery procedures. Applied Medical sells a competing device called Voyant.
Meanwhile, with contractual mandates with GPOs to only buy LigaSure devices, the lawsuit alleged that hospitals faced “financial penalties” and other burdens under these contracts if they circumvented the GPOs. A jury in Los Angeles agreed with Applied Medical’s stance. The court found that Medtronic had been using restrictive contracts with healthcare providers. Following the verdict, Applied Medical confirmed it will seek injunctive relief to prohibit Medtronic from enforcing the restrictions.
“This is not just a legal victory for Applied; it is a validation of fair competition,” said Gary Johnson, group president for advanced energy and Applied Medical’s representative throughout the trial, in a 6 February statement.
“We believe this decision marks a turning point for hospitals and healthcare providers struggling to dismantle complex contractual barriers that have long prevented them from access to innovation, choice and value,” Johnson continued.
Medical Device Network has reached out to Medtronic for their outlook on the court ruling.
During the proceedings, Applied Medical highlighted that it was shut out from competing for hospitals’ business with its equivalent Voyant device and prevented from prospering due to these arrangements. Furthermore, the company alleged that Medtronic also had bundling practices in place that further stifled competition.
Apart from bipolar devices, Applied pointed out that Medtronic had a much larger business in other surgical products, yet allegedly conditioned discounts for these products on hospital’s also buying Medtronic’s bipolar devices.
According to Applied, given it did not market these other products, it could not match Medtronic’s bundled discounts and thus could not “compete in the bipolar-device market, even though it offers a better product,” court documents stated.
