The Federal Trade Commission says the nation's three largest dental-product distributors, including Minnesota's Patterson Cos., have been illegally restraining competition and distorting prices in the $10 billion market for products used by dentists.
Gloves and cement, dental chairs and lights — all are offered with bulk discounts through large national dental-supply distributors, including Patterson of Mendota Heights, New York-based Henry Schein Inc., and Pennsylvania-based Benco Dental Supply Co.
This week the FTC announced it was suing the distributors in federal administrative court for allegedly conspiring to restrain trade. The FTC alleges the distributors conspired to refuse to provide discounts to buying groups that negotiate bulk discounts on behalf of small and solo dental practices.
"The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups," the FTC said in a news release.
Patterson, Henry Schein, and Benco control about 85 percent of the market for their supplies, the FTC says. Patterson is thought to control about a third of the market.
All three dental supply companies defended their practices in statements on Tuesday. Patterson called the FTC's allegations "meritless" and said it will defend itself vigorously against the claims. Henry Schein noted that it does business with dozens of different buying groups.
The FTC allegations come as the companies battle similar claims in a spate of private antitrust lawsuits filed since 2012. Securities filings for Patterson and Schein say the companies have been hit with numerous lawsuits, including a series of lawsuits pending in federal court in New York, that allege a pattern of fixing prices, allocating customers and boycotting entities for anticompetitive reasons.
Stock prices for Patterson and Henry Schein fell sharply just after the allegations were announced Monday night, but recouped some of the losses Tuesday. Patterson closed down 5 percent, and Henry Schein fell 6.5 percent.