Skip to content
Link copied to clipboard

Update: Feds bust Conshy firm that overcharged medical-device makers

Invibio agrees to change contracts

The Federal Trade Commission today accused Invibio Inc., a Conshohocken-based, British-owned company that supplies medical-device makers with high-tech materials for spinal implants and other medical devices, of illegally keeping prices high "by using long-term exclusive contracts to maintain its monopoly." Invibio agreed to settle the FTC's charges, FTC says in this statement.

THURSDAY UPDATE: "We have not admitted any violations of any law," Andrew Hanson, spokesman for Victrex Plc, Invibio's owner, told me, citing terms of the consent decree.  "There are no penalties or fines" so long as the companies comply with the agreement for the next 20 years. Victrex cut a deal "quickly and without admitting to any violations" so its bosses could stay focused on products, sales and "minimising business disruption." Business won't be affected, he added.

FTC doesn't name the manufacturers it believes were victimized by Invibio, or estimate how much manufacturers, consumers or insurers paid extra because of Invibio actions.  More about FTC accusations here, settlement order here, FTC analysis here.

According to the FTC, Invibio "was the first company to sell implant-grade polyetheretherketone, known as PEEK, to medical device makers," starting in 1999. PEEK is a low-toxic plastic that endures high temperatures and tough conditions.

Invibio had the market to itself for the next 10 years. Starting in 2010, rivals Solvay Specialty Polymers LLC and Evonik Corp. began marketing competing products, "but Invibio's anticompetitive tactics impeded them from effectively competing for customers. As a result, Invibio has managed to retain approximately 90 percent of PEEK sales worldwide," FTC added in its statement.

Invibio imposed "all-or-nothing" contracts forcing manufacturers "to use PEEK for all or nearly all of their PEEK-containing implantable devices" to keep prices high and prevent effective competition, FTC said. "The firm's use of exclusive contracts constitutes monopolization in violation of the FTC Act."

"The first company to enter a market cannot rely on anticompetitive contract terms to lock up customers and box out rivals," Debbie Feinstein, chief of FTC's Bureau of Competition, said in the statement. She said the settlement is designed to provide medical-device makers with "a meaningful choice among suppliers, to open the door to price competition, and to enhance innovation."

Under the 20-year deal to settle the charges, Invibio and Victrex agreed to stop using exclusive supply contracts, to stop setting price, purchase or service terms that have the effect of enforcing exclusivity, and to modify existing contracts, ending exclusivity, while also setting up an "antitrust compliance program."

FTC commissioners voted 3-0 to approve the deal. The agreement will be published in the Federal Register later today, the agency said, and the public will have 30 days to comment.