Small Medtech TELA Bio Takes On Becton Dickinson, Alleges Hernia Mesh Monopoly

Becton, Dickinson & Company (NYSE:BDX) is facing allegations that it abused monopoly power in the U.S. hernia mesh market to block competition, raise costs for hospitals, and limit treatment choices for patients, according to a lawsuit brought by small-cap firm TELA Bio, Inc. (NASDAQ:TELA).

The complaint argues that Becton Dickinson used restrictive contracting practices to exclude a lower-cost, physician-preferred product from hospitals nationwide.

Thomson Reuters published a copy of the lawsuit online on Monday.

Also Read: Medtronic’s Hugo Robotic System Achieves 100% Success Rate In Hernia Repair Trial

Market Structure And Product Segments

The lawsuit centers on two segments of the hernia mesh market: permanent mesh and resorbable mesh.

Permanent mesh, a low-cost plastic product used in most hernia repairs, represents the larger volume market. Resorbable mesh, which integrates into the body over time, is typically used in more complex procedures.

Becton Dickinson is accused of dominating both categories. The company allegedly controls roughly 65% of the U.S. permanent hernia mesh market by dollar share and about 77% of the resorbable mesh segment, giving it outsized influence over pricing and purchasing decisions at hospitals.

After establishing a strong position in permanent mesh, Becton Dickinson introduced its Phasix resorbable mesh line in 2012. By 2016, Becton Dickinson reportedly controlled nearly three-quarters of both markets combined, the lawsuit alleges.

Competitive Entry And Pricing Pressure

That same year, TELA Bio entered the U.S. market with OviTex, a resorbable mesh made from sheep-derived extracellular matrix reinforced with synthetic fibers.

The product was priced 15% to 45% lower than Becton Dickinson’s Phasix and, according to the complaint, delivered strong clinical performance and patient outcomes.

Physicians increasingly preferred OviTex, the lawsuit claims, citing its balance of strength, absorption, and cost. Rather than lowering prices or improving its own product, Becton Dickinson allegedly relied on its market power to protect Phasix.

Contracting Practices Under Scrutiny

TELA Bio alleges that Becton Dickinson used overlapping, multi-year contracts with group purchasing organizations, integrated delivery networks, and individual hospitals to restrict access to OviTex.

Those agreements allegedly tied discounts on Becton Dickinson’s permanent mesh and other products to limits on competing resorbable mesh offerings.

As a result, TELA Bio says its market share remained marginal despite physician demand, while Becton Dickinson’s higher-priced Phasix remained entrenched in hospitals.

Patient Impact And Alleged Harm

The complaint highlights patient harm tied to the alleged conduct. In one case, a surgeon was reportedly denied approval to use OviTex because of hospital contracts with Becton Dickinson.

The patient’s family ultimately paid out of pocket, but the patient’s condition worsened, and the patient later died during surgery.

TELA Bio is seeking damages, injunctive relief, and other remedies to restore competition and expand patient and provider choice in the hernia mesh market.

In 2022, a Becton Dickinson unit, C.R. Bard, was ordered to pay $4.8 million over claims tied to its hernia repair mesh. The company continues to face more than 30,000 related lawsuits involving its mesh products.

A Hawaii man has filed a new lawsuit alleging severe complications following the implantation of Bard’s hernia repair mesh.

Price Action: TELA Bio shares were up 1.75% at $1.15 during premarket trading on Tuesday, according to Benzinga Pro data. BDX stock closed at $196.74 on Monday.

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