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Dispute Resolution Considerations for Healthcare Companies with Overseas Suppliers - Dispute Resolution Journal - Vol. 69, No. 4

Author(s): 
Christopher M. Mason
Michele A. Masucci
Kate A. F. Martinez
Craig Tractenberg
Page Count: 
16 pages
Media Description: 
1 PDF Download
Published: 
December, 2014

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Originally from Dispute Resolution Journal

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INTRODUCTION
 
It has become conventional wisdom to say that the modern world is
becoming “flatter” each day with respect to trade and commerce.
Many goods and services previously made or supplied only
domestically are now regularly sourced from overseas. But when
resolving disputes with an overseas manufacturer, distributor, or
supplier (we will use the term “supplier” to cover all of them here),
sometimes this flat world may nonetheless not produce a level playing
field. In fact, with some suppliers of healthcare products from some
countries, there can be a pronounced tilt, one sometimes not even
visible to a United States buyer. In this article we address some major
issues, and identify possible solutions, to help you reduce the tilt of
the playing field in such situations through arbitration clauses.2
 
PURCHASES OF HEALTHCARE PRODUCTS
FROM OVERSEAS
 
Information about the volume of goods purchased from overseas
for use in the healthcare industry in the United States is fragmented.
Indeed, even the overall volume of goods purchased anywhere for
such use is somewhat unclear. In their recent paper on Estimates of
Medical Device Spending in the United States, for example, Gerald
Donahoe and Guy King “did not find a single, empirical study on
systemic spending on all types of medical devices.”3
 
It is clear, however, that the overall market is large and that there
are purchasers likely to buy in quantity. As the most recent quasigovernmental
estimate of the overall market for medical devices in
this country notes:
 
The United States . . . account[s] for nearly 50 percent of the
$273 billion global market by sales. Domestically, the largest
consumers of medical devices are hospitals, outpatient care
facilities, and private physicians’ practices. Devices are
commonly acquired by administrators within these markets.
To gain more power to negotiate over the costs of medical
devices, many of these market participants join group
purchasing organizations (GPOs).4