Friday, April 29, 2011

More on Puncture

This time from DOTmed:
In the suit, Shaw claimed, in essence, he was shut out of the hospital market and nearly driven out of business because of exclusive supply contracts between the other syringe-makers and the GPOs that, in some cases, could prevent hospitals from buying needles from smaller suppliers -- such as Shaw's company. The defendants claimed Shaw's product was rejected for market reasons, such as its high cost.  
But in July 2003, Tyco, Premier and Novation settled with Retractable. The settlement was sealed, but a 2005 Fortune article said the defendants together coughed up about $50 million. Premier and Novation also said they would change their business practices. Although Becton Dickinson initially appeared to hold out, in 2004 it agreed to pay Retractable $100 million to settle the claims of illegal market manipulation, making Shaw, in the words of the Fortune article, "the richest citizen in Little Elm, Texas." 
Good for Shaw but bad for us, as these practices continue unabated.  I didn't know BD had settled either- $50M between Premier and Novation isn't chump change, but that $100M figure should be a red flag that something terribly fishy was going on at Becton Dickinson.

2 comments:

  1. Wait, I don't know who Tyco, Premier, and Novation are...are they GPOs?

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  2. Yep. The three biggest GPOs are Novation, Premier and MedAssets, and they represent roughly two-thirds of the value of the entire GPO industry (~$100 billion). (http://www.hpnonline.com/resources/GPOs.html)

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