Most of the press attention to the upcoming merger between Zimmer and Biomet, two leading medical-device manufacturers, has been focused on the $13 billion price tag and the fact that the two companies are crosstown rivals, both headquartered in the same small Indiana town. If it’s approved by the Federal Trade Commission (FTC), the merger – which is really more of an acquisition – will take Zimmer to the #2 spot in medical-device manufacturing. It will also give Zimmer a significant leg up in the hip and knee implant market.
But at Consumers Union, we’re focusing on how the merger will affect warranties. We’ve been running a campaign to get warranties on hip and knee implants, opposed at every turn by the companies who don’t want to guarantee their own products’ efficacy. Biomet is the only company in the field that offers a warranty on any of its products – a lifetime warranty on one knee replacement, even though it isn’t as good as it could be – and we’re concerned that Zimmer, which hasn’t shown any interest in placing warranties on its devices, will discontinue that warranty as soon as its consolidation with Biomet is final.
We’ve written a letter to the FTC urging them to consider preserving the Biomet warranty as part of the merger, and to keep the importance of warranties in mind for robust competition in the rest of the field as well. Not only do warranties provide quality-improvement incentives for manufacturers, they give peace of mind to patients who already have enough to worry about. And without warranties, patients, insurance companies, and taxpayers (in the case of Medicare) have to foot the bill for surgical replacement of failed and recalled devices (recall info here and here).
That’s why it’s important for this one example of a warranty in the field to stick around, as a foundation to build on and an example for other companies. But our letter isn’t enough. We need you to help us pressure the FTC into doing the right thing for patients and the healthcare financial system. Sign our petition and stand up for those who can’t stand up for themselves!