The Federal Trade Commission (FTC) filed a complaint against the nation’s three largest dental supply companies, alleging that they violated US antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices.
The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights.
Collectively, the big three control more than 85% of all distributor sales of dental products and services nationwide. The US market for dental products is valued at approximately US$10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Responding to allegations made about the company by the FTC, Henry Schein said it believes that the allegations are meritless and intends to defend itself vigorously. The company stated that it does not anticipate that this matter will have a material adverse effect on its financial condition or results of operations. Based on the FTC’s press release, the company is being accused of participating in a conspiracy to refuse to provide discounts to, or compete for, the business of buying groups.
Full Content: Reuters
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