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J&J; Wins Rival’s Antitrust Lawsuit

From Bloomberg News

Johnson & Johnson won an antitrust lawsuit Tuesday that accused the company of illegally using its suture monopoly to boost sales of other surgical products.

A federal jury in Santa Ana rejected claims by Applied Medical Resources Corp. that Johnson & Johnson’s Ethicon unit blocked competition in the market for trocars, instruments used in so-called keyhole surgery.

Closely held Applied Medical sued in 2003 for $54 million in damages, which would have been tripled under federal antitrust laws.

“Johnson & Johnson convinced the jury that the hospitals, and ultimately the consumer, benefited from what they were doing,” said William White, an antitrust attorney with Hill, Farrer & Burrill in Los Angeles. “Monopolists have to walk a very fine line, because what may be legal for a non-monopolist can be illegal for a monopolist.”

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Applied Medical, based in Rancho Santa Margarita, said Ethicon took away its sales by offering discounts on sutures to hospitals that also bought the company’s trocars and clip appliers.

New Brunswick, N.J.-based Johnson & Johnson argued that the bundling contracts didn’t unfairly exclude other suppliers and were requested by hospitals that sought lower prices.

“Our contracts for hospital products are awarded as an outcome of a competitive bidding process and respond to customer demand,” company spokesman Jeffrey Leebaw said.

Karen Gibbs, general counsel for Applied Medical, had no immediate comment.

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A trocar is a pointed cylinder that is inserted into the body as a pathway for surgical instruments. About $285 million worth of trocars are sold in the U.S. each year, Applied Medical said in its suit. The market for clip appliers, instruments inserted through trocars to close off blood vessels, is about $100 million a year.


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