Inverness Medical Innovations Inc. (NYSE:IMA) and a Chinese medical products distributor, Chinmax Medical Products Inc., are embroiled in a dispute over the rights to sell Inverness subsidiary Biosite’s Triage line of diagnostic products in the People’s Republic.
Shanghai-based Chinmax claims to hold the exclusive right to distribute the Triage brand in China and filed suit in March against Inverness Medical Beijing Co. Ltd. and another distributor, Shanghai Tongwei Medical Device Co. Ltd., accusing them of infringing that right, according to a press release.
Representatives from Inverness did not return multiple calls seeking comment.
The case took another turn this week, with Chinmax claiming that the Inspection and Quarantine Bureau of Beijing Customs seized shipments of the products, precipitating a "severe shortage" of Triage products in China, according to a press release.
"According to Beijing Customs, the Inspection and Quarantine Bureau of Beijing Customs raised questions regarding the propriety of the importation documents submitted by Inverness Medical Beijing, and subsequently seized all products imported at issue,” according to the release. "Currently, there is not much inventory left in the market, and it is estimated that the existing inventory can only last about a week. Some hospitals have already run out of Biosite products. Once a hospital runs out of Biosite products, it will be forced to use alternative products from other manufacturers.”
Chinmax claims to have sold about $20 million worth of Biosite products last year. Its lawsuit against the Inverness subsidiary and Shanghai Tongwei alleges that the pair "illegally imported a large quantity of Biosite Triage products beginning in August 2009, and sold the products to Chinmax’s agents and end users," according to a press release. "When confronted, IMB denied that it had engaged in any illegal importation.”
Chinmax says it’s the only "government certified service agent" cleared by China’s State Food and Drug Administration to sell Biosite products there. The company said it’s been selling the products for a decade and "helped Biosite to grow its heart failure diagnostics market share in China from zero to more than 80 percent" during that time, according to a press release.
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