Government Files Antitrust Suit against Stericycle

The merging of Stericycle and Healthcare Waste Solutions would reduce competition and increase customer cost, according to the New York attorney general.

New York joined the U.S. Justice Department in filing an antitrust lawsuit in the U.S. District Court for the District of Columbia challenging the planned acquisition by Stericycle, a medical waste services company of Healthcare Waste Solutions Inc. (HSW), according to a press release from the office of Attorney General Eric T. Schneiderman.

“Restoring New Yorkers’ faith in the private sector requires real competition and fair prices,” said Schneiderman. “The New York City metropolitan area is the largest market in the nation for medical waste services, making it all the more critical that there is genuine competition and that one company is unable to set arbitrary prices.”

New York State’s civil complaint is filed under Section 7 of the Clayton Act, a federal antitrust law under which the Attorney General has the authority to sue to block anticompetitive mergers. It charges that, unless remedied, Stericycle, the dominant firm nationally for collecting and treating medical waste generated by hospitals and other medical facilities, will control about 90 percent of the medical waste business in the New York City metropolitan area, comprised of the city plus Westchester, Rockland, Nassau and Suffolk counties in New York and seven nearby counties in New Jersey and Connecticut. The action follows a six-month investigation in which the attorney general cooperated with the Justice Department's pre-merger review.

A corresponding agreement with Stericycle requires the company to sell HWS’s medical waste transfer station in the Bronx to a credible competitor. In New York City and surrounding counties, only one small competitor presently has a transfer station that competes with the several owned by Stericycle and one by HWS. To preserve that competition, Stericycle and HWS have agreed to sell the HWS transfer station to a credible. That up-to-date-facility, at 1281 Viele Avenue in the Bronx, serves a number of the area's leading hospitals with its 80,000 pounds-per-day capacity.

A new competitor in the area would use the Bronx transfer station to compete with Stericycle and would help keep prices down and the quality of services high to the hospitals, clinics, doctors' offices, nursing homes, and other medical providers in New York City and surrounding areas, according to the attorney general.

Medical waste, most of which is considered infectious, is handled by a specialized, economically and environmentally critical industry, which exists largely apart from conventional waste haulers. All aspects of medical waste collection, transportation, and treatment are subject to stringent federal, state, and local legal requirements. Medical waste companies must be specially licensed and their facilities, which are limited to relatively few locations, must be permitted through long and potentially burdensome processes. Hospitals must carefully segregate and handle waste in cooperation with medical waste services companies, which typically send their collection route trucks to important facilities know as transfer stations for transport by trailer trucks to more distant treatment and ultimate disposal facilities.

Source: New York Attorney General

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