Hill-Rom Holdings faces a lawsuit by rival Linet over allegedly monopolistic behavior that the medical supply powerhouse ices competitors through anti-competitive practices.
In a lawsuit filed Tuesday, Linet says Hill-Rom captured the business of large health systems such as Providence Health, Cleveland Clinic and Universal Health bundling multiple product contracts under one corporate enterprise agreement that trumped Linet's growing marketshare through group purchasing organizations.
Linet entered the U.S. market in 2010, and mainly entered through relationships with group purchasing organizations that provided them with the ability to go after hospital bed bids. But the company says that with the consolidation of hospitals across the country, Hillrom went after these entities to pen multi-year and exclusive contracts. These integrated systems usually have in-house supply chain functions that control what products their vast network of hospitals have to use.
"Hillrom's IDN-focused strategy would ensure that the prey had already been caught and tied up by the time Linet could even use its newly won licenses [with GPOs] to start hunting," Linet alleges in the lawsuit. "And, because IDNs often influence GPOs, Hillrom knew that it could then use the IDNs to ultimately oust Linet from the GPO distribution channel as well, thereby killing two birds with one stone and ensuring that all avenues to hospital customers were closed."
Linet is asking the U.S. District Court for the Northern District of Illinois to determine that Hillrom engaged in unlawful acts in violation of the Sherman Act, award Linet damages and prohibit Hillrom from entering into more agreements with integrated delivery networks, and stop enforcement of current contracts.
Hillrom has long dominated the hospital bed market. In 1995, federal agencies investigated the company over an antitrust probe. Since then, Hillrom has made numerous acquisitions, growing its portfolio from hospital beds to digital medical devices and analytics. Medical products giant Baxter in early Dec. completed a $10.5 billion purchase of Hillrom, and said they plan to expand Hillrom products internationally and move more into physician offices, ambulatory care centers and patient homes.
Hillrom and Baxter did not respond to requests for comment.