Consumers allege Idexx has engaged in anticompetitive and predatory practices that have caused them to pay artificially high prices for diagnostics tests. In this blog post, we will explore the main allegations and arguments of these lawsuits, and what they mean for the veterinary industry and pet owners.
Allegations against Idexx
Idexx has abused its dominant market position to lock out competitors.
Lawsuits claim that Idexx has a market share of over 70% in the U.S. market for point-of-care (POC) diagnostic products, which are tests that are performed at or near the site of patient care, such as in a veterinary clinic. The lawsuits allege that Idexx has used its market power to prevent or hinder its competitors, such as Heska and Zoetis, from accessing the distribution channels and the customers that are essential for competing in this market. The lawsuits cite several examples of Idexx's anticompetitive conduct, such as:
By Entering into long-term and exclusive contracts with distributors.
Idexx has entered into long-term and exclusive contracts with veterinary product distributors, such as MWI, Patterson, and Henry Schein, that prevented distributors from selling or promoting any competing products. These contracts were challenged by the Federal Trade Commission (FTC) in 2013, and Idexx was ordered to stop using them and to allow non-exclusive and short-term contracts. 1 2
By Entering into log-term and exclusive contracts with veterinary clinics: Entering into long-term and exclusive contracts with veterinary practices, that required them to purchase a minimum amount of Idexx products per year and imposed steep penalties or fees for switching to or using any competing products. These contracts also included automatic renewals and extensions, that made it difficult for the practices to terminate or renegotiate them. 1 2
The lawsuits argue that these practices have created significant barriers to entry and expansion for Idexx's competitors and have reduced the choice and competition in the market for POC diagnostic products. 1 2
Idexx has caused consumers to pay supracompetitive prices: Lawsuits claim that Idexx has exploited its dominant market position to charge higher prices for its POC diagnostic products than it would have in a competitive market. The lawsuits allege that Idexx has increased its prices by an average of 8% per year since 2013, and that its prices are 30% to 50% higher than those of its competitors. The lawsuits cite several examples of Idexx's price gouging, such as:
○ Charging $35 for a heartworm test, while Heska charges $12 and Zoetis charges $15. 1
○ Charging $45 for a fecal test, while Heska charges $15 and Zoetis charges $18. 1
○ Charging $65 for a thyroid test, while Heska charges $25 and Zoetis charges $30. 1
The lawsuits argue that these prices are unjustified and unreasonable, and that they have caused consumers to pay millions of dollars more than they should have for the POC diagnostic products. 1 2
Implications of the lawsuits
The lawsuits against Idexx have significant implications for the veterinary industry and pet owners, such as:
Improved access to care: Consumers cite increasing prices as a barrier to complying with veterinarians' recommendations for care. Competitive pricing of diagnostic testing should allow more customers to obtain care for their animals.
More innovative and diverse products and services: Decreasing barriers to entry would allow more veterinary diagnostic companies to access to animal health markets, driving the development of innovative products and services at a fair and competitive prices.
Conclusion
Idexx is facing several lawsuits from consumers who accuse the company of engaging in anticompetitive and predatory practices that have caused them to pay artificially high prices for its POC diagnostic products. The lawsuits allege that Idexx has abused its dominant market position to lock out competitors and to charge supracompetitive prices to consumers. The lawsuits have significant implications for the veterinary industry and the pet owners, as they could lead to lower prices and better quality, and to more regulation and oversight of the market.
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