“Align’s monopoly on the teeth-straightening market has been all crooked.”
So says Steve W. Berman, managing partner of Hagens Berman, and attorney for consumers in the class action. Named one of the 100 most powerful lawyers in America, the lawsuit claims that since at least 2017, Align has charged high prices to garner high profit margins by having Invisalign protected by a “thicket of hundreds of patents that Align wielded aggressively to protect its monopoly.”
A bastion brand of cosmetic dentistry, Invisalign can be found in every city and the charge for an Invisalign dental treatment is commonly up to $US8000. Even if it’s an option, dental insurance generally only covers a minority of costs, and benefits are often capped somewhere between 25 and 50 percent, leaving purchasers paying the gap.
With gross margins in excess of 75 percent, Align earns well over a billion dollars a year from Invisalign products. According to the class action it continues to annually increase prices.
iTero is an Align scanner product, a hand-held digital intraoral scanner used by individual small-time Invisalign providers such as Plaza Dental to take digital jaw, teeth and bite images of patients . Unlike its competitors, it uses a closed system that imposes substantial costs to dentists attempting to use iTero to order products not manufactured by Align. Sales are thereby driven to Invisalign.
The 36-page document was filed on May 3, 2021 in the U.S. District Court of the Northern District of California, the lawsuit accuses Align of violating federal antitrust laws, and various consumer protection laws, by monopolising the dental aligner market. Subsequently, it controls more than 80 percent of the market and continues with a variety of anticompetitive tactics in its dogged determination to stymie alternatives to Invisalign purchases. Not only does Align control through iTero, it also disallows rival scanner manufacturers to order Invisalign.
Attorneys say Align “…sacrificed short term profits to cement a long term monopoly that would allow them to overcharge consumers in perpetuity.” This anticompetitive scheme paved the way for Align being able to overcharge, leaving consumers paying thousands of dollars in out-of-pocket expenses.
According to the filing, this creates “a self-reinforcing cycle where Align’s dominance of the Scanner market ensured continued dominance of the Aligner market.”
Consumers are not only seeking reimbursement for the overpaid amount to Invisalign as a direct result of the monopoly, but also an injunction to bring an end to Align’s price-fixing scheme.
Berman sees it as an,“… established and highly protected system, one hand washes the other, reinforcing Align’s dominance in these markets that leave consumers and dental offices trapped.”
The legal team of Hagens Berman has an extensive track record of taking on massive antitrust cases. It has won record-breaking class settlements for many pharma-related and consumer-focused cases where justice was paid in damages for millions of people. The biggest compensation payment was $US560 million collective settlement against Apple and publishing companies for price-fixing e-books.
The lawsuit quotes Align CEO Joe Hogan in 2017, “We’ve been in business now for almost 20 years, and we’ve had so few competitors … people think it’s because we have this great IP -it’s true we have good intellectual property – but it took 15 years for people to really believe that you can move teeth with plastics. It gave us this period of time to really iterate and learn without the outside influence of other competitors coming in.”
Steve Berman knows his stuff. As Special Assistant Attorney General in 1998, he stood as Co-Lead Counsel and successfully had eleven states (Alaska, Arizona, Idaho, Illinois, Indiana, Ohio, Oregon, Nevada, Montana, Rhode Island and Vermont) prosecute the tobacco industry. It resulted in vast marketing and advertising restrictions and the payment of $US206 billion – the largest settlement in history.