THE LATEST: Health Care Antitrust Enforcement Remains a Top Priority for New FTC Commissioners

by McDermott Will & Emery
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McDermott Will & Emery

On April 27, 2018, the United States Senate confirmed President Trump’s five nominees for Commissioners of the Federal Trade Commission (FTC). Three are Republicans: Chairman Joseph Simons, Noah Phillips and Christine Wilson, and two are Democrats: Rohit Chopra and Rebecca Slaughter. The Senate’s vote returns the FTC to a full complement of Commissioners for the first time under the Trump Administration. Of note to participants in the health care sector: the FTC shares civil antitrust law enforcement jurisdiction over the health care industry with the Department of Justice Antitrust Division, but takes the lead when it comes to the health care provider, pharmaceutical and medical device industries.

FTC Antitrust Enforcement in Health Care Will Likely Remain Robust

It is very unlikely that President Trump’s newly confirmed FTC Commissioners will usher in a period of more lax antitrust enforcement at the FTC, including in health care. For example, during a February 14, 2018, Senate confirmation hearing on four of President Trump’s nominees to serve as FTC Commissioners, each of them testified that antitrust enforcement in the health care sector will remain a top priority of the Commission.

  • Chairman, Joseph Simons (R): “Americans are hearing more about antitrust, seeing high health care costs . . . . I am here before you because if confirmed I want to help lead the FTC at this critical time.”
  • Christine Wilson (R): If confirmed, she anticipates “spending a great deal of time and effort” to “ensuring competition in healthcare markets.” Ms. Wilson will not take her seat until the Senate votes on current Chairman Maureen Ohlhausen’s nomination to the US Court of Federal Claims.
  • Noah Phillips (R): The FTC “has a proud, decades-long…record… to keep competition going in healthcare markets, from reviewing mergers of hospitals, to policing prescription drug prices. If confirmed, I look forward to working to make that issue a priority.”
  • Rohit Chopra (D): “It must be a top priority to enforce all the applicable laws” in the health care and pharmaceutical markets. (After this hearing, on March 26, 2018, President Trump nominated Rebecca Slaughter [D] for the remaining Commissioner vacancy.)

Is Past Prologue: The Presumptive New Chairman’s Prior Tenure at the FTC

These views are underscored by the track record of Joseph Simons, President Trump’s nominee for Chairman. Simons served from 2001-03 as the Director of the Bureau of Competition at the FTC, during the administration of President George W. Bush. During that stint, Simons led the Bureau’s merger and non-merger antitrust law enforcement efforts and brought a record number of civil actions against health care providers. Here are some highlights from Simon’s prior tenure at the FTC:

  • Creation of the Hospital Merger Litigation Task Force
    • Led to the creation of the Mergers IV division, which reviews health care provider mergers and acquisitions.
    • Announced a “hospital merger retrospective” to analyze what happened to prices and purported efficiencies after recently consummated hospital mergers. This study led to a formal investigation in 2003 and complaint in 2004 concerning a merger that was consummated in 2000.
  •  Renewed Focus on Administrative Litigation
    • Significantly increased the number of administrative trials, including merger, price-fixing and monopolization cases.
  • Reinvigoration of FTC’s Non-Merger Enforcement Program
    • Initiated more than 100 non-merger enforcement investigations.
    • Broke a 20-year-old record for non-merger enforcement actions performed in a single year.
    • Concluded at least 13 physician group price-fixing consent decrees, with several completed shortly thereafter. 
  • Continued FTC Enforcement Efforts in the Pharmaceutical Industry
    • Pursued investigations and consent orders regarding what are now called “pay-for-delay” agreements between branded and generic drug competitors, while also litigating In the Matter of Schering-Plough, which had its origins under Simons’ predecessor.
    • Took actions against pharmaceutical companies for allegedly misusing US Food and Drug Administration (FDA) processes for the purpose of delaying market entry of generic competition.
    • Brought five enforcement actions resulting in divestitures through consent agreement.

The Takeaway

With the unusual opportunity to nominate every FTC Commissioner taking his or her seat more or less at the same time, President Trump has populated the Commission with officials who have indicated that health care antitrust enforcement will remain a top priority for the agency. Industry participants should therefore expect no let-up in the scrutiny that the FTC places on health care providers and pharmaceutical companies when they engage in mergers and acquisitions or in conduct that is susceptible to concerns about anticompetitive effects.

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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