Devicemaker broke $2.1B contract to provide VA hospitals with critical medical supplies, lawsuit alleges

Spartan Medical, a medical device supplier, filed a lawsuit accusing Globus Medical, a devicemaker, of breaking its $2.1 billion contract to supply Veterans Affairs hospitals with medical supplies.

Spartan Medical and Globus subsidiary Bone Bank Allografts signed a deal in 2016 for BBA to supply Spartan with medical products, which Spartan would then distribute to VA hospitals. 

BBA sent a letter to Spartan in May 2018 saying it would provide it with an "uninterrupted source of supply" of medical products, according to the lawsuit. But in November, BBA sent Spartan a letter terminating the agreement without providing a reason, an action Spartan says is forbidden in the contract.

The deal was worth $2.1 billion, according to the lawsuit. 

Spartan is now accusing Globus of breach of contract and fraud, as well as of violating antitrust laws. Spartan claims Globus terminated the contract so its other distributors could sell the products at higher prices. 

"In a time of war where the United States of America is committed to containing threats against its allies and the homeland, defendants are illegally disrupting plaintiff’s supply contract with the U.S. Department of Veterans Affairs and Department of Defense to provide critically needed medical tissue products used at first response military hospitals," the lawsuit reads.

Becker's Hospital Review has reached out to Spartan and Globus for comment and will update this story accordingly. 

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