CADE convicts three companies and 16 individuals of bid rigging for purchase of orthoses and prostheses

On 22 May, the Administrative Council for Economic Defense (CADE) convicted the companies Medtronic, Abimed, and Boston Scientific, in addition to 16 individuals of bid rigging. They purchased orthoses, prostheses, and special medical supplies in the market of implantable cardiac pacemaker devices and other devices used to diagnose and treat cardiovascular diseases.

The investigation of the case known as the “cartel of cardiac orthoses and prostheses” started at the beginning of November 2015, after CADE received a complaint from the Brazilian Ministry of Justice and Public Security (MJSP). Fines imposed on the parties involved in the collusion surpass BRL 100 million. The Brazilian Fund for De Facto Joint Rights (FDD) collected a similar amount in financial contributions, as a result of a cease and desist agreement signed by the companies St. Jude Medical Brasil and Biotronik Comercial Médica.

The antitrust violation occurred between 2004 and 2015, involving companies, associations, and individuals. They were accused of defrauding the competitive nature of tenders to acquire devices, such as implantable cardioverter defibrillators, cardiac resynchronization, pacemakers, electrodes, tear-away introducers, and catheters.

According to the body of evidence, the parties involved colluded to fix prices and trading conditions; exchange competitively sensitive information; divide markets between competitors; impose entry barriers for new countries in the market; and influence the adoption of concerted practices.

Mr Alexandre Cordeiro, president of CADE, reinforced that companies integrating professional bodies, associations, or unions should be attentive not to surpass their legitimate purpose, leading to antitrust violations.

“Sometimes, companies use associations to exchange sensitive information, such as prices and market strategies, which can lead to antitrust violations. Associations and unions should be careful and avoid conduct that harms the principle of free competition. In this context, business associations can eventually commit illegal practices for various reasons, depending on the information exchanged on the scope of the association”, he claimed.

According to the Office of the Superintendent-General of CADE (SG/CADE), in addition to the market division, there was collusion among the medical teams. Thus, the main manufacturers of implantable cardiac pacemaker devices and other devices used to invest in hospitals, research, and clinical studies, in addition to sponsoring organisations led by doctors.