The Justice Department has opened an antitrust probe of Medtronic's acquisition of a competitor, which some lawmakers have tied to a shortage of ventilators early in the COVID-19 pandemic, The Wall Street Journal reported.
The probe centers on deals dating to 2012, when Covidien, a ventilator-maker, bought NewPort Medical Instruments, a small, California-based ventilator-maker, for $108 million.
Medtronic bought Covidien three years later in a deal valued at roughly $50 billion, the Journal reported. Both deals received antitrust clearance from the Federal Trade Commission.
But as hospitals scrambled to get enough ventilators to meet demand early in the pandemic, experts said industry consolidation was partly to blame for a shortage of supplies and that federal antitrust regulators weren't doing enough to protect competition, according to the Journal.
"Covidien’s purchase of a potentially market-disrupting competitor that threatened to drive prices down has all the hallmarks of a killer acquisition, where an incumbent firm acquires and then shuts down a key rival," Democrats on a House antitrust subcommittee said in April.
A spokesperson for Medtronic told the Journal that the company is fully cooperating with the Justice Department's review of the deal. The ventilator market remains competitive with at least 10 major players, the Medtronic spokesperson added.
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