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In a high-stakes trial underway in the U.S. District Court for the Central District of California, Innovative Health CEO Rick Ferreira testified that a tying policy implemented by Johnson & Johnson’s unit, Biosense Webster, significantly harmed his company’s business, marking a key moment in the ongoing J&J catheter tying policy antitrust case.

Ferreira, who founded Arizona-based Innovative Health in 2015, told the jury that after his company received FDA clearance to reprocess Biosense’s sensor-enabled electrophysiology catheters in 2016, Biosense enforced a policy to withhold cardiac mapping support services from hospitals that chose to purchase reprocessed catheters from Innovative rather than Biosense.

“We were thrilled to gain FDA approval — and shocked two weeks later to learn hospitals wouldn’t receive support if they used our catheters,” said Ferreira. “It was devastating.”

Innovative Health is seeking $143 million in damages, alleging that Biosense engaged in illegal tying arrangements by conditioning support for its Carto 3 cardiac mapping system on exclusive catheter purchases. The company argues this violates both the Sherman Act and California’s Cartwright Act.

Ferreira told jurors that Innovative’s reprocessed catheters — including the AcuNav, Soundstar, and LassoNav — undergo rigorous safety testing and provide hospitals with cost savings of $1,500 to $1,700 per device compared to brand-new models, which can cost up to $3,500.

The heart of the J&J catheter tying policy antitrust case centers on Biosense’s decision to officially adopt its restrictive case coverage policy in 2016, just as Innovative emerged as a competitive threat. Ferreira testified that hospitals were deterred from switching to cost-saving reprocessed catheters, fearing loss of support services from Biosense.

“This policy still impacts us today. Our business could be double its size if not for that restriction,” Ferreira said.

Jurors were presented with internal emails from hospital staff expressing interest in Innovative’s more affordable catheters, only to face warnings from Biosense about discontinued procedure support.

Although the district court originally dismissed the case in 2022, the Ninth Circuit revived the lawsuit in 2023, finding that there were valid questions regarding whether Biosense’s support was unlawfully tied to exclusive catheter sales.

In response, Biosense claims its policy is justified to ensure service quality and prevent competitors from free-riding on its clinical infrastructure. On cross-examination, Ferreira acknowledged that Biosense earns no revenue when its catheters are reprocessed and resold by Innovative, and that Biosense bears the cost of clinical support.

Despite this, Innovative maintains that the anticompetitive impact of Biosense's policy violates federal and state laws and has unfairly restricted hospitals from choosing cost-effective reprocessed devices.

The trial is ongoing, with testimony expected to resume Thursday.