Olympus Raises Prices, Pushes Sales of Dangerous Scopes
When a company’s products are linked to illnesses and death, the affected items are usually taken off the market until they are deemed safe for consumers. But in a turn of events, medical scope manufacturer Olympus, not only kept the potentially dangerous and potentially life-threatening scopes on the market, but, it also increased their prices! This action has tainted a once-close relationship between Olympus and UCLA Medical Center.
In February 2015, a superbug outbreak infected nearly 200 patients at UCLA Medical Center, killing three. The outbreak was linked to Olympus’ TJF-Q180V duodenoscope. The scope’s faulty design makes it impossible to fully sanitize the device, allowing bacteria to linger and infect others. The company, which manufacturers 85% of medical scopes used in the United States, has allegedly known about the flawed design since 2012, but did nothing to fix it.
After the outbreak, UCLA ceased use of the dangerous duodenoscopes, and needed replacement devices. UCLA was hoping that Olympus would provide replacements or at a minimum, replacements at a reduced cost. This seemed logical, based on the mutually-beneficial relationship they enjoyed in the past. Instead, Olympus shamefully asked UCLA to fork over $1.2 million for 35 new scopes. This price was a 28% hike, from just a few months earlier. Olympus justified the price increase by citing a case of supply and demand. Because of the demand, the company could no longer offer discounts.
This sudden price increase will likely mark the end of the close collaboration between Olympus and UCLA. Olympus helped UCLA fund medical conferences, while UCLA allowed the company to observe medical procedures. UCLA still uses Olympus equipment, but is now utilizing some medical scopes made by Olympus’s rival, Pentax Medical.
Olympus was relentless when it came to increasing sales. It was recently discovered that the company used kickbacks to bribe doctors to use their products. Olympus would offer incentives, such: as spa packages, lavish meals, winery tours and balloon rides in order to win over business from hospitals and doctors. Olympus even offered cash and free equipment, as a means of currying favor among those that were decision makers for medical equipment purchases. The company’s sales practices violated federal law and Olympus is being forced to pay a $635 million fine, making it the largest fine ever paid by a single manufacturer.