Health Law Alert: Special Focus: Antitrust: The Noerr-Pennington Exemption: Freedom to Stifle Impending Competition - Maybe


Entry by a competitor into a highly concentrated market can benefit consumers by leading to lower prices, innovation, and increased competition. In the case of health care services, a new hospital or other type of provider that enters a market otherwise dominated by a large incumbent, or the expansion of another incumbent, can offer health plans and their enrollees an alternative to the dominant provider. There are often barriers to entry, to be sure, even when a potential entrant is wellfunded and eager to compete. As the Seventh Circuit’s recent decision in Mercatus Group, LLC v. Lake Forest Hospital, 631 F.3d 834 (7th Cir. 2011), makes abundantly clear, an incumbent provider can successfully block a competitor from entering the market in some situations; and, it can avoid antitrust liability despite acting with anticompetitive intent, especially when the blockage results from the incumbent provider’s petitioning the government for anticompetitive action. But when the petitioning includes making intentional misrepresentations, the standards become less clear.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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