St. Francis Medical Center, Cape Girardeau, Mo., failed to convince a judge that catheter manufacturer C.R. Bard used group purchasing contracts to illegally stifle competition.
Court rejects hospital's complaint against Bard
The U.S. Eighth Circuit Court of Appeals upheld a lower court’s decision to dismiss the hospital’s allegations that Bard’s contracts through Novation, a group purchasing organization, were anti-competitive and resulted in above-market prices for catheters, court records (PDF) said.
The hospital’s complaint lacked necessary evidence to continue, the appeals court said. And the lawsuit suggests vendor group purchasing contracts did not influence the hospitals’ purchasing decisions as much as doctors did, the court said, citing testimony from St. Francis’ head of purchasing, who said doctors controlled “85% of the (catheter purchasing) decision.” The hospital’s claim that claw-back contract provisions—Bard may take back discounts when hospitals do not order enough—were anti-competitive also fell short, the court said.
“Hospitals may (and do) purchase products off-contract, including catheters, if they can bet a better product or a better price,” the order said. “Because the GPO-negotiated contracts are voluntary agreements, terminable at will and on short notice, any hospital could, at any time, decide to forgo the offered discounts and purchase catheters from a different brand.”
The ruling included one dissenting opinion. Judge C. Arlen Beam said he believed the case contained “disputed questions of material fact” and would send the case back to the lower courts.
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