Healthcare is Fighting Back Against Monopolies

Recent lawsuits have addressed monopolistic behavior in the healthcare supply chain. Hospitals are under great financial pressure, yet suppliers leverage monopoly positions to maximize their profits.

Times are tough for US hospitals. Prices keep going up and reimbursement is not. As a result, insurance companies make more money, healthcare technology companies make more money, and pharmaceutical companies make more money. Only the provider loses: The average hospital in the US in August last year had a 1% operating margin. Hospital closures have reached record levels.

The average hospital in the US in August last year had a 1% operating margin.

In contrast, the top 5 medical device companies control up to 30% of the global market – and have a net income of more than 25 billion dollars. The profit pool grew by 38% over the last 5 years to $72 billion. Pharmaceutical companies are winners too: The top 5 control 25% of the market and have net income of almost $90 billion dollars. The profit pool grew by 25% over the last 5 years to $170 billion. The top 5 insurance companies control 70-75% of the national commercial market and have net income of $30 billion. The profit pool grew by 36% over the last 5 years to $117 billion.

With this kind of market concentration, 2 things happen: Providers – hospitals and doctors - have less and less real choice over what they buy – and prices go up.

So, while pharmaceutical, medical device, and health insurance companies have no problem making money, it is different for hospitals. Decreasing reimbursement, increasing costs, and the shift to outpatient care sites squeeze operating margins and limit profit pool growth. Over the past 15 years, more hospitals have closed than opened. Last year alone, there were at least 23 reported hospital closures or planned closures in the United States. Hospital layoffs are at record highs. On top of everything else, insurance premiums have been going up, and medical debt is a real problem: Medical debt is, in fact, the leading cause of personal bankruptcy in the United States. The structural problems in our health system are ultimately paid for by the patient.

Last year alone, there were at least 23 reported hospital closures or planned closures in the United States.

The concentration of pharmaceutical and medical technology supplies in relatively few large, global corporations is part of the problem. More precisely, the occasional abuse of monopoly positions to drive higher profits is very costly for hospitals that are already operating on thin margins. However, it does seem as if the legal system is finally paying attention.

Thursday, a California federal jury ordered Medtronic to pay nearly $382 million to its competitor Applied Medical for antitrust violations. The jury found that the medical device giant illegally used its monopoly power to crush competition in the advanced bipolar device market. Section 4 of the Clayton act makes it mandatory for the judge in these cases to allow the plaintiff to recover three times the actual financial harm sustained from anticompetitive conduct, so ultimately, Applied Medical will be awarded more than $1 billion. Medtronic has already indicated that it will appeal the decision. The jury deliberated for less than two hours before finding in favor of Applied Medical: Medtronic used anticompetitive tactics, including bundling products for sale in a way that made it nearly impossible for the much smaller Applied Medical to compete. With Medtronic being the largest medical device supplier in the world, Applied Medical can't offer the array of bundled devices that Medtronic can. Internal documents and emails showed how Medtronic had deployed a sophisticated strategy to crush Applied Medical.

Six years ago, Innovative Health filed a lawsuit against Biosense Webster for monopolizing and restraining trade in the nationwide markets for the sale of high-density mapping catheters and ultrasound catheters. A California district court held an eight-day jury trial in May 2025. Witnesses from both sides testified. One hospital administrator said that Biosense Webster’s policies “stop us from being able to meet our goal of making healthcare affordable to everyone. We're paying full price for something that we can get at a fraction of the cost.”

On May 16, 2025, the jury returned a unanimous verdict in Innovative Health’s favor on all four counts presented at trial, finding that Biosense Webster violated federal and California antitrust laws. A permanent injunction issued August 27 ordered Biosense Webster to discontinue its practices and policies designed to restrict the use of reprocessed devices. In a September press release, Innovative Health CEO Rick Ferreira said, “Our customers have really felt taken advantage of. It is on their behalf we brought this case, and the court’s decision is their victory as much as it is ours. Monopolistic conditions for too long have permitted suppliers to bully hospital buyers into taking deals that effectively cost more or provide lesser care”. The tragedy of this situation is that when companies such as Biosense Webster (J&J MedTech) use their monopoly power to sell more, the ultimate victim is the hospital – and the patient.

The jury’s decision in the Biosense Webster trial happened after 3 hours of deliberation. Innovative Health was awarded $147 million in damages. The U.S. District Judge later trebled this amount to $442 million.

The Medtronic decision is similar to the Biosense Webster decision: It is illegal to bundle your products/services with something nobody else can offer. In the Biosense case, it was mapping support. In the Medtronic case, it was access to the largest portfolio of medical devices in the world at a discounted price. The fact that these two similar decisions come within less than a year of each other is an indication that judges and juries are fed up with monopolistic behavior.

I encourage hospital supply chain executives to review your next contract with a MedTech or Pharma supplier or distributor carefully, and make sure you look in detail at the contract terms and identify any instance of bundling. Bundling is illegal when it’s used to block competitors offering only one of those product lines - and claim higher profits. While bundling arrangements may seem to provide benefits, bundling harms hospitals when they pay higher prices and have less choice. Tell the sales rep about these two legal decisions. And remind them that the price to pay in court for illegal bundling is substantial.