Tag: Antitrust

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Health Law Highlights

FTC Seeks to Secure First Disgorgement in Nearly a Decade

Summary of article by Womble Bond Dickinson (US) LLP:

The FTC announced that Cardinal Health, Inc. has agreed to pay $26.8 million to settle allegations of anticompetitive behavior, marking the agency’s first disgorgement in a competition case in nearly a decade. The Complaint, filed in the Southern District of New York, accuses Cardinal of monopolizing the radiopharmaceuticals market by securing exclusive distribution rights to essential heart perfusion agents from Bristol-Myers Squibb and General Electric, thus impeding competition in 25 geographic markets. The Commission’s decision to pursue disgorgement was narrowly approved by a 3-to-2 vote, with dissenting Commissioners arguing insufficient evidence of antitrust violations and lack of clear guidance on disgorgement policies. Traditionally reserved for severe antitrust breaches like price fixing, this use of disgorgement could signal a shift in enforcement strategies, though it may also be specific to the unique circumstances of this case. The settlement awaits federal court approval.

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Health Law Highlights

Ramping Up: Antitrust Enforcement in Health Care

Summary of article from Dickinson Wright, by Patrick Masterson, Pahl Zinn:

In early 2024, the Biden administration intensified antitrust enforcement, particularly targeting the healthcare sector. December 2023 saw the release of new Merger Guidelines by the FTC and DOJ, lowering thresholds for anti-competitive assessments and focusing on healthcare mergers. February 2024 marked a joint inquiry into private equity’s influence in healthcare, with public comments open until July. The FTC also finalized a rule banning noncompete agreements, extending its jurisdiction to certain nonprofit healthcare entities. Additionally, the DOJ established a Task Force on Health Care Monopolies and Collusion to address antitrust issues in the sector.

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Health Law Highlights

For All Intents and Purposes the Ninth Circuit Shakes Up Antitrust Law With Sidibe v. Sutter Decision

Summary of article from Proskauer Rose LLP, by David Munkittrick, Evelyn Blanco:

The Ninth Circuit Court’s decision in Sidibe v. Sutter Health may significantly alter the approach to rule of reason antitrust cases by emphasizing the importance of historical evidence and the intent behind challenged conduct. The court reversed the District Court’s ruling due to the exclusion of pre-2006 evidence and errors in jury instructions, which failed to consider Sutter Health’s purpose. The majority opinion argued that understanding the intent is crucial for a comprehensive assessment of antitrust claims, while the dissent warned against overcomplicating trials with extensive historical context. This ruling suggests a potential shift towards incorporating intent more prominently in antitrust analyses, raising questions about trial complexity and jury management. Legal professionals will need to adapt to these changes to effectively advocate in antitrust cases.

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Health Law Highlights

Health Care, AI and Antitrust: Analysis and Next Steps

Summary of article from Manatt, Phelps & Phillips, LLP, by Dylan Carson, Harvey Rochman:

As artificial intelligence (AI) becomes more prevalent in the health care industry, there are growing concerns about potential anticompetitive conduct, including algorithmic price fixing. This issue was highlighted in a recent New York Times report alleging that certain health plans and administrators were using the same company’s algorithmic tools to set out-of-network rates, potentially leading to higher costs for patients. Antitrust enforcers argue that using the same AI systems to set prices could be seen as collusion and therefore a violation of antitrust laws. Health care companies are advised to closely monitor these developments and consider the potential legal risks associated with their use of AI.

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Health Law Highlights

DOJ Introduces Task Force on Health Care Monopolies and Collusion

Summary of article from King & Spalding, by Catherine Behnke:

The Department of Justice (DOJ) recently announced the establishment of a Health Care Monopolies and Collusion (HCMC) Task Force. This initiative is part of the Biden administration’s broader effort to enhance antitrust enforcement in the health care sector, including measures aimed at increasing transparency, promoting competition, and curbing corporate greed. The HCMC Task Force will identify and address monopolistic and collusive practices that contribute to rising health care costs and decreased quality of care. The Task Force will focus on issues such as payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, health care IT services, and misuse of health care data. The HCMC Task Force will include a multi-disciplinary team of civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, investigators, and policy advisors.

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Health Law Highlights

FTC Cleared To Sue Texas Anesthesia Co., But Not PE Firm

Summary of article from Law360, by Bryan Koenig:

A Texas federal judge has ruled that the Federal Trade Commission (FTC) lacks the authority to pursue antitrust claims against private equity firm Welsh Carson Anderson & Stowe, but can proceed against the anesthesia group the firm created, U.S. Anesthesia Partners Inc (USAP). The judge ruled that the FTC could not prove an ongoing or likely future antitrust violation by Welsh Carson, which had sold off its controlling stake in USAP in 2017. This decision could impact the FTC’s efforts to challenge private equity strategies of acquiring entire sectors through individual transactions. The ruling also underscores the FTC’s ongoing struggle to expand its authority under Section 13(b) of the FTC Act. Despite this, the judge found sufficient evidence of ongoing violations by USAP, allowing the FTC’s case against it to proceed.

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Alert

Feds Launch Website for Reporting of Health Care Anticompetitive Practices

On April 18, 2024, the Federal Trade Commission (FTC), U.S. Department of Justice (DOJ), and U.S. Department of Health and Human Services (HHS) launched a public web portal for reporting anticompetitive practices in the health care sector. The portal, www.healthycompetition.gov, allows anyone to submit complaints about potential anticompetitive conduct in the healthcare industry. The portal provides information about federal laws ensuring healthy competition and examples of conduct that can harm competition in healthcare. The agencies have not limited the sources of reports, implying a wide scope for potential informants, from the general public to industry insiders. The launch of this portal necessitates increased vigilance from healthcare entities, as any information could potentially trigger an investigation by the FTC or DOJ.

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Alert

Justice Department, Federal Trade Commission and Department of Health and Human Services Issue Request for Public Input as Part of Inquiry into Impacts of Corporate Ownership Trend in Health Care

From DOJ Office of Public Affairs:

The Justice Department’s Antitrust Division, Federal Trade Commission (FTC), and Department of Health and Human Services (HHS) have launched a joint public inquiry into the increasing control of private-equity and corporate entities over healthcare. This inquiry aims to understand how certain healthcare market transactions may lead to increased consolidation, generate profits for firms, and potentially threaten patient health, worker safety, and the affordability and quality of care.

The agencies are seeking public comment on deals conducted by health systems, private payers, private equity funds, and other alternative asset managers that involve healthcare providers, facilities, or ancillary products or services. This includes transactions that would not be reported to the Justice Department or FTC for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act.

Research indicates that competition in healthcare provider and payer markets promotes higher quality, lower-cost healthcare, greater access to care, increased innovation, higher wages, and better benefits for healthcare workers. The responses to the RFI will inform the agencies’ enforcement priorities and future actions, including potential regulations aimed at promoting and protecting competition in healthcare markets and ensuring appropriate access to quality, affordable healthcare items and services.

The public, including patients, consumer advocates, doctors, nurses, healthcare providers and administrators, employers, insurers, and more, are invited to share their comments in response to the RFI within 60 days. The agencies are particularly interested in comments on a variety of transactions, including those involving dialysis clinics, nursing homes, hospice providers, primary care providers, hospitals, home health agencies, home- and community-based services providers, behavioral health providers, as well as billing and collections services.

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Health Law Highlights

DOJ, FTC Looking at Roll-Up Acquisitions for Anticompetitive Acts

From The National Review, by Jessica Sprovtsoff of ArentFox Schiff LLP:

In December 2023, the White House announced plans to intensify antitrust scrutiny in the healthcare sector, focusing particularly on “roll-up” acquisitions, a practice where a company acquires several smaller entities, potentially leading to market consolidation. This strategy can potentially violate antitrust laws, but each individual acquisition often falls below the size criteria for pre-acquisition reporting to antitrust enforcement agencies.

The US Department of Justice (DOJ) and the Federal Trade Commission (FTC) have responded by planning to collaborate on data sharing to the maximum extent, aiming to detect potentially anticompetitive transactions that might not usually qualify for antitrust enforcement reviews.

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Health Law Highlights

FTC Seeks to Put Private Equity Roll-Up Strategies to Sleep With its Case Against U.S. Anesthesia Partners

From Winston & Strawn, by Neely Agin and Hannah Gallagher, writing for AHLA (Subscription):

  • FTC and DOJ have increased regulatory scrutiny on the health care industry, particularly private equity investors.
  • FTC Chairwoman Lina Khan has expressed concern over “roll-up” or consolidation strategies in the health care industry, citing potential negative effects on quality of care and costs for patients.
  • In its recent complaint against Welsh Carson and USAP, the FTC alleges a “multi-year anticompetitive scheme” to consolidate anesthesiology practices in Texas and drive up prices.
  • The complaint also includes claims against Welsh Carson, the private equity firm, and not just the portfolio company.
  • This lawsuit serves as a reminder to private equity firms to carefully consider potential antitrust risks in their investments and post-consummation behavior.