As part of its mission to ensure competition in the healthcare industry, the Federal Trade Commission (FTC) recently filed a complaint alleging that three of the largest U.S. distributors of dental products and services, Henry Schein, Benco Dental Supply Co. and Patterson Cos. Inc., violated antitrust laws by conspiring to refuse discounts to buying groups that negotiate on behalf of individual and small-group dental practices, and agreeing not to compete for the buying groups’ business. The FTC files a complaint when it has “reason to believe” that the law has been or is being violated and it appears that a proceeding is in the public interest. A complaint does not constitute a determination that the law has been violated as alleged. In a statement, a representative of Henry Schein described the allegations as “meritless.”
It remains to be seen how this allegation will be resolved, but the case highlights the challenges facing dental providers who are trying to remain independent in a landscape increasingly dominated by consolidations and DSOs. Without the economies of scale realized by large-group practices and DSOs (such as the power to negotiate the price of supplies and payor reimbursements), many solo and small-group practices are finding it difficult to compete.
Frier Levitt’s Dental Practice Group understands the unique legal and business issues affecting the practice of dentistry. For more information, contact Frier Levitt to speak with an attorney.
