Melville Company Cited FTC's Antitrust Lawsuit

The 135 Duryea Road, Melville headquarters of Henry Schein, Inc. (Long Islander News photo/archives)

By Connor Beach
cbeach@longislandergroup.com

The Federal Trade Commission announced Monday a lawsuit against the nation’s three largest suppliers of dental equipment, including Melville-based Henry Schein, Inc., for violating federal antitrust laws.

The complaint, filed by the FTC, alleges Henry Schein conspired with Pennsylvania-based Benco Dental Supply Company and Minnesota-based Patterson Companies, Inc. to “refuse to provide discounts to or otherwise serve buying groups representing dental practitioners.”

The buying groups that Henry Schein allegedly refused to provide services to were working on behalf of individual or small-group dental practices. The buying groups helped these small businesses get more competitive prices by leveraging their collective purchasing power to create a stronger bargaining position.

The FTC alleges that the three companies “deprived independent dentists of the benefits of participating in buying groups.”

The FTC said the “big three” were able to effectively deny discounts to the buying groups because, collectively, Benco, Henry Schein and Paterson account for more than 85 percent of all dental product sales in the U.S. market, which the FTC said is valued at around $10 billion.

The complaint states communications between executives of Henry Schein and Benco provide evidence of the agreement between the companies.

A statement issued Tuesday morning by Henry Schein officials called the lawsuit “meritless,” and said that the company “intends to defend itself vigorously.”

The statement continued, Henry Schein is a “leader in supplying buying groups, has consistently done business with buying groups, has a dedicated team to serve buying groups, and never entered into an agreement with others to refuse to do business with buying groups.”

Henry Schein executives do not feel that the lawsuit will have any “material adverse effect on our financial condition,” according to the statement.

Henry Schein’s stock fell from $72 per share Monday night to just over $68 as of deadline Wednesday.

FTC commissioners Maureen Ohlhausen and Terrell McSweeny voted 2-0 to issue the complaint, and an administrative trial is scheduled to begin Oct. 16.