Scope Price Raised After Superbug Outbreaks
After a deadly outbreak of Carbapenem-resistant Enterobacteriaceae (CRE) at UCLA Ronald Reagan Medical Center, the Federal Food and Drug Administration issued a warning about duoendoscopes manufactured by Olympus Corp. The clear connection between the use of these specific scopes and the infection that ended in multiple deaths left the staff at the medical center scrambling for replacements. Olympus may have taken advantage of that situation by raising prices for replacement scopes.
The Outbreak at UCLA
In 2015, UCLA discovered an outbreak of CRE while running tests on a patient. They began notifying 179 individuals treated from October to January that they may have been exposed to an antibiotic-resistant pathogen the spreads to the bloodstream and kills 40 to 50 percent of the time.
The outbreak was traced back to the use of duoendoscopes during a minimally invasive medical procedure call endoscopic retrograde cholangiopancreatography. Despite cleaning and disinfecting the scopes following instructions from the manufacturer, the devices were tainted. Since 2012, this same device has been linked to multiple outbreaks throughout the country including ones in Seattle and Chicago.
A Question of Profiteering
After detecting the problem, the administration at UCLA asked Olympus to lend them replacement scopes. The Tokyo company refused the loan but did offer to sell the hospital new scopes with a different design at a 28 percent increase.
The manufacturer argued this was not a case of price gouging, but simply one of supply and demand. The sales manager for Olympus told the hospital that their supply of replacement scopes was low and the product was in high demand with all academic institutions. Olympus also stated that UCLA had been privy to discounts with the last batch of scopes, but they were no longer in effect.
The new pricing was sudden and unexpected. Up until that time, UCLA and Olympus maintained a mutually beneficial relationship. Once the outbreak was confirmed, that relationship apparently changed. Although this prestigious academic medical center did have a dire need for new scopes, they had also started a market rush for the improved design. Facilities from around the country were looking to replace their problematic scopes with new ones, as well, increasing the demand for the product.
Just a few days prior to discovering the tainted scopes, an Olympus salesman provided a doctor at UCLA with special contracted pricing information on scope-related accessories. Three days later the outbreak was confirmed and that pricing disappeared.
Despite the fact that a product produced by Olympus Corp. was responsible for the outbreak at UCLA, they decided a price increase was appropriate. A Senate investigation has linked Olympus to 19 superbug outbreaks in both the U.S. and Europe including the ones at UCLA and Cedars-Sinai Medical Center. The report indicates that Olympus failed to alert hospitals about the risk of infection with this design in a timely manner.