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Henry Schein, Inc.

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Case Summary

Company Name
Henry Schein, Inc.
Stock Symbol
HSIC
Class Period
March 7, 2013 to February 12, 2018
Motion Deadline
May 6, 2018
Court
Eastern District of New York

The complaint charges Henry Schein and certain of its officers with violations of the Securities Exchange Act of 1934.  Henry Schein provides health care products and services to dental practitioners and laboratories, animal health clinics, physician practices, government and institutional health care clinics, and other alternate care clinics worldwide.

The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Henry Schein’s business and operations.  Specifically, the complaint alleges that defendants concealed that during the Class Period Henry Schein was engaged in unethical anti-competitive behavior in violation of U.S. antitrust laws, and that Henry Schein had engaged in such behavior, in part, to help maintain its profitability in the face of a consolidating health care industry.  These violations of the U.S. antitrust laws would result in heightened scrutiny of the Company by the federal government and a lawsuit filed by the Federal Trade Commission (“FTC”).  As a result of defendants’ failure to disclose this unethical anti-competitive behavior, Henry Schein securities traded at artificially inflated prices, with its stock price reaching a high of $93.29 per share during the Class Period.

Then on February 12, 2018, the FTC announced it had “filed a complaint against the nation’s three largest dental supply companies” alleging that they “violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners [who] sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of individual practices.”  According to the complaint, Henry Schein allegedly entered into an agreement with Benco Dental Supply Company and Patterson Companies, Inc. to refuse to provide discounts to or compete for the business of buying groups.  Based on the agreement among the distributors, the complaint contends “that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition . . . ; and eliminated or reduced the competitive bidding process for sales to these buying groups.”  On this news, the price of Henry Schein shares fell $4.79 per share, or over 6.5%, to close at $67.39 per share on February 13, 2018.

Class Period: March 7, 2013 - February 12, 2018
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