J&J Antitrust Trial Heats Up as Innovative Health CEO Testifies on Market Suppression

A high-profile antitrust trial in the U.S. District Court for the Central District of California took a pivotal turn this week, as Innovative Health CEO Rick Ferreira provided detailed testimony against Johnson & Johnson subsidiary Biosense Webster, accusing the medical device giant of enacting a policy that stifled competition and severely impacted his company’s growth.

According to a statement made during the proceedings, Ferreira asserted that Biosense Webster’s policy of withholding critical cardiac mapping support services from hospitals that opted to use Innovative’s reprocessed catheters effectively curtailed hospital adoption of the lower-cost alternatives. The policy, Ferreira said, was implemented shortly after Innovative Health gained FDA approval in 2016 to reprocess Biosense’s advanced electrophysiology catheters.

Ferreira described the abrupt fallout to the jury, recounting that hospitals quickly backed away from Innovative’s products despite demonstrated cost savings of up to $1,700 per device. According to a statement, Innovative alleges this strategy was part of an illegal tying arrangement that forced hospitals to remain exclusively with Biosense products in order to retain access to its Carto 3 cardiac mapping system.

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The legal claims cite violations under both the federal Sherman Act and California’s Cartwright Act, with Innovative Health seeking $143 million in damages. Central to the case is whether Biosense’s refusal to provide procedural support to non-exclusive customers constitutes an unlawful restriction of trade.

Jurors were shown internal communications during Ferreira’s testimony that illustrated the chilling effect the policy had on market competition. Some hospital staff expressed interest in Innovative’s more affordable options, only to receive warnings that such a switch would jeopardize critical procedural coverage from Biosense. Per a statement presented during the trial, Ferreira contended that this dynamic dramatically slowed his company’s growth and prevented hospitals from benefiting from more economical catheter options.

“This policy still impacts us today,” Ferreira testified. “Our business could be double its size if not for that restriction.”

Although the lawsuit was initially dismissed in 2022, the Ninth Circuit Court of Appeals revived the case last year, concluding that the legal issues around Biosense’s business practices deserved further scrutiny.

Biosense has defended its actions, arguing that its policy is necessary to maintain high service standards and that it should not be compelled to support competitors who do not contribute to its revenue stream. On cross-examination, Ferreira acknowledged that Biosense receives no income from catheters reprocessed and sold by Innovative, despite continuing to incur the costs associated with clinical support.

Source: USA Herald