Company price signal to decrease competition

Competition in the medical device field is limited with relatively small number of companies. Therefore, when a company markets new medical device, it signals to the existing competitors intent on price competition. If the new medical device is priced similar to existing devices, the company is signaling it does not desire price competition. In general, companies in medical device field do not want to engage in price competition since that diminishes profit margins. Companies instead compete by using various strategies that are essentially kickbacks in disguise. These include consulting agreements which including speaking engagements, grants for fellowships and research, royalties for patents, and acquisitions of companies.