Recently enacted regulations had enabled medical devices companies to charge health insurers significantly more for their products than had previously been the case – but a challenge against the legality of the new regime was now being brought on competition grounds. 

The client wished to test how likely it was that this challenge would be successful. Herminius established that the new measures had been introduced to industry-wide approval in order to improve quality in the sector and ameliorate supply problems. Fringe arguments that the market was less competitive than it had been reflected a lack of understanding of the market dynamics – indeed, there was widespread consensus that consumers were now receiving better medical care. Multiple suppliers continued to compete against each other. There was no appetite among either end-users or health insurers to return to a lower price/lower quality market model. 

Procurement rules would naturally change over time, but no sustained examination of the market’s competitive dynamics would support a finding against the current system within the foreseeable future. The client continued to pursue its investment, satisfied that the probability of regulatory changes undermining its thesis was minimal.