My Aching Hip – Part V
During an earnings call yesterday, the CEO of Stryker reiterated the earlier reports that the Department of Justice’s antitrust investigation into the orthopedic industry is focused on a single, and unsuccessful, incident. Dow Jones Newswires, via Easy Bourse, reports that:
The top official at Stryker Corp. (SYK) on Monday backed assessments from competitors that suggested a Department of Justice antitrust investigation of the orthopedics sector is based on a single, unsuccessful attempt to set an industry pricing strategy. … Zimmer Holdings Inc. (ZMH) and Biomet Inc. (BMET) said in late July that the investigation appeared tied to an attempt by a single sales representative to initiate an industry-pricing strategy in response to a hospital request for proposals. They didn’t specify the representative’s affiliation, but Smith & Nephew PLC (SNN) confirmed on July 31 that it was an independent sales representative under contract with the company. Smith & Nephew said the email “was in clear contravention” of company policies and wasn’t acted upon. MacMillan [Stryker's CEO] agreed that the probe seems to have a narrow focus and said “there’s not much there” with the issue. He also said collusion is unlikely in the competitive orthopedics sector. “This industry is too darn competitive to allow price fixing,” he said.
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