Suture Express Files Antitrust Lawsuit Against Cardinal Health and Owens & Minor

  Suture Express Files Antitrust Lawsuit Against Cardinal Health and Owens &
                                    Minor

Lawsuit seeks more than $200 million in damages and changes in business
practices

PR Newswire

OVERLAND PARK, Kan., Dec. 6, 2012

OVERLAND PARK, Kan., Dec. 6, 2012 /PRNewswire/ -- Suture Express, the leading
specialty distributor of suture, endomechanical and related surgical products,
has filed an antitrust lawsuit in the United States Federal District Court for
the District of Kansas against Cardinal Health and Owens & Minor, both
broad-based wholesale distributors of medical and surgical supplies.

The suit claims Cardinal Health and Owens & Minor abused their market power
and engaged in anticompetitive behavior to prevent their customers from taking
advantage of specialty suppliers, like Suture Express, which better serve
customer needs within their specialties. The suit seeks changes in business
practices by Cardinal Health and Owens & Minor to create a level playing
field, as well as more than $200 million in damages to compensate the company
for lost sales.

"Cardinal Health and Owens & Minor contracts threaten customers with
prohibitive financial penalties and other disincentives if they don't agree to
include suture and endomechanical products in their orders," said Brian
Forsythe, CEO of Suture Express. "Imposing these financial penalties would
make it financially impossible for customers to buy suture and endomechanical
products from another distributor, even if offered significantly better
service and prices."

The lawsuit alleges that Cardinal Health and Owens & Minor resorted to
anticompetitive practices to protect their dominant market shares despite
their inability to deliver suture and endomechanical products as efficiently
or cost-effectively as Suture Express. Availability of the right sutures and
endomechanical products is critical both to doctors and to patients undergoing
almost any invasive medical procedure. However, because the product range is
so great and the products are so specialized, the broad-based distributors
stock a much smaller percentage of the products than specialty distributors
like Suture Express, which stocks the vast majority of them. The Suture
Express model ensures doctors have what they need to treat patients, when they
need it.

"We have an innovative business model that addresses the unique distribution
challenges of specialty surgical products," Forsythe said. "Suture Express
aggregates national demand for these specialty products, carefully monitors
the supply and demand characteristics for each unique product, and stocks
virtually every product in the category at its secure Midwest distribution
center. By focusing specifically on suture and endomechanical product
distribution, Suture Express can provide efficient, cost-effective, overnight
delivery of the highly specialized products in these categories."

As a result, Suture Express helps reduce overall healthcare costs, according
to Forsythe. Hospitals supplied by Suture Express spend less on procurement
and minimize the amount of staff time required to ensure doctors have the
products they need. In addition, the company can virtually eliminate the wait
hospitals might face for products the broad-based distributors don't stock,
according to Forsythe, making the entire supply chain more efficient. "Our
highly flexible and reliable service model provides certainty of supply for
these specialty products. This enhanced certainty permits hospitals to reduce
inventory carrying costs and minimize waste generated by product obsolescence
or expiration."

Many customers can't choose to work with Suture Express because of the
financial penalties and other disincentives imposed by Cardinal Health and
Owens & Minor, from whom those customers buy a wide range of other medical and
surgical products, according to the lawsuit. Suture and endomechanical
products make up only about 10 percent of the medical products many customers
buy from Cardinal Health and Owens & Minor. The two companies use their
dominant shares in the remaining 90 percent of medical products to force
customers to buy suture and endomechanical products from them as well. Suture
products include sutures, skin adhesives, surgical needles, and other wound
closure products. Endomechanical products include devices such as surgical
staplers and laparoscopic tools.

As a result of the abuse of market power to reduce competition by Cardinal
Health and Owens & Minor, Suture Express has lost substantial sales during the
last four years, according the to the lawsuit. Antitrust suits carry treble
damages, which is why Suture Express is seeking in excess of $200 million from
the two defendants. The lawsuit claims that Cardinal Health and Owens & Minor
have violated Section 1 of the Sherman Act, Section 2 of the Sherman Act,
Section 3 of the Clayton Act, and Kansas Statutes, Chapter 50, Unfair Trade
and Consumer Protection. Debevoise & Plimpton, LLP and Polsinelli Shughart
LLP represent Suture Express in the lawsuit.

"In filing this case, we're asking the court to ensure a level playing field
so customers don't face financial disincentives for choosing innovative
specialty distributors like Suture Express," Forsythe said. "We want to
ensure that companies like ours – which come up with new, innovative and more
affordable ways to serve the healthcare market – get a fair shot against the
entrenched giants of healthcare distribution. We just want to be able to
compete based on our ability to deliver enhanced service at an extremely
competitive price."

About Suture Express
Suture Express is the nation's leading specialty distributor of suture,
endomechanical and other surgical products, with more than 6,000 SKUs always
in stock and ready to ship. The company's centrally located operations enable
rapid service and delivery to any provider in the United States. Customers
include independent hospitals and integrated delivery networks, as well as
ambulatory surgery centers and clinics. Suture Express is based in Overland
Park, Kan., and its distribution center is in Lenexa, Kan.

SOURCE Suture Express

Contact: Patrick Fitzgibbons, Fleishman-Hillard, New York, +1-212-453-2124,
patrick.fitzgibbons@fleishman.com
 
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