$147 Million Verdict for AMDR Member Innovative Health in Case Against Johnson & Johnson’s Biosense Webster Medical Tech Unit

05/18/2025 – 04:32 PM

WASHINGTON and BERLIN—(BUSINESSWIRE)—
A federal jury in Santa Ana, California, delivered a landmark ruling Friday, siding with medical device reprocessor Innovative Health in its antitrust lawsuit against Johnson & Johnson (NYSE: JNJ). The verdict signals a significant shift in the healthcare supply chain landscape, affirming legal rights for hospitals to use FDA-regulated reprocessed “single-use” devices (SUDs) without facing coercive market tactics.

The jury determined that Biosense Webster, a JNJ subsidiary, illegally withheld clinical support from hospitals utilizing Innovative Health’s reprocessed catheters, thereby violating federal and state antitrust laws. Daniel J. Vukelich, president and CEO of the Association of Medical Device Reprocessors (AMDR), described the outcome as a “catalyst for change,” applauding the decision as dismantling practices that inflate healthcare costs and stifle innovation.

“This ruling exposes a long-standing imbalance in the medtech sector,” Vukelich remarked. “Hospitals deserve the freedom to adopt reprocessed SUDs—proven safe by the FDA—without fear of retaliation. The verdict reinforces their right to prioritize cost efficiency, sustainability, and operational resilience.”

Reprocessed SUDs, a domestically regulated offering, have become a critical tool for hospitals aiming to tackle three pressing challenges: financial sustainability, supply chain fragility, and environmental obligations. By reusing devices under FDA guidelines, healthcare facilities can trim procurement costs, reduce emissions tied to manufacturing new equipment, and mitigate shortages that plagued the industry during the pandemic.

The case underscores broader tensions between original equipment manufacturers (OEMs) and reprocessors, a sector AMDR estimates serves 9,400+ facilities in the U.S., Canada, Europe, Japan, and Australia. Over decades, OEMs have employed opaque contractual clauses, software-driven obsolescence, and inventory interference to protect revenue from disposable SUDs, Vukelich noted. The Santa Ana ruling offers an opening to reclaim fair competition.

Key tactics identified in the trial, and previously flagged by AMDR, include:

1. Threats to void warranties if reprocessed SUDs are used, which contravene federal antitrust statutes. AMDR advises hospitals to formalize policies prohibiting retaliatory measures and document any such communication.
2. Unapproved software updates designed to deactivate reprocessed devices. The trade group urges procurement teams to require written consent before upgrades and verify firmware revisions post-service.
3. Embedded chip technologies (ePROMs) that “brick” reprocessed equipment. AMDR recommends contract language outright banning such features and penalizing forced obsolescence.
4. Contractual fine print tying discounts to exclusive OEM device use. Hospitals must quantify hidden costs of forgoing reprocessing savings during negotiations.
5. Price inflation of OEM reprocessable models to push buyers toward higher-margin disposable alternatives. Monitoring SKU pricing across vendors can expose these covert strategies.
6. Active interference with hospital inventory, such as discarding reprocessed device bins. AMDR calls for immediate suspension of vendors engaging in property tampering.
7. Circulation of biased, internally funded clinical studies. AMDR suggested referring suspect data to infection-control panels and limiting vendor access.

The legal landscape is evolving. According to AMDR, the verdict in *Innovative Health, LLC v. Biosense Webster, Inc.* may embolden hospitals to resist vendor coercion. “The rules of engagement are changing,” Vukelich said. “Hospitals can no longer afford to tolerate anti-competitive sabotage that harms margins and planet Earth.”

About AMDR

The Association of Medical Device Reprocessors, established in 1997, spearheads global advocacy for the reprocessing industry. Members include industry titans like Arjo ReNu Medica, Innovative Health, Medline Renewal, Stryker’s Sustainability Solutions, Sustainable Technologies, and Vanguard AG. The group emphasizes reprocessing’s role in strengthening supply chain security while meeting sustainability goals—a strategy it says is vital amid escalating tariffs and geopolitical diversions.