Public Portal To Promote Healthy Competition – Antitrust, EU Competition

On Thursday, April 18, the Department of Justice
(“DOJ”), the Federal Trade Commission (“FTC”),
and the Department of Health and Human Services (“HHS”)
announced the launch of an online portal that allows the public to
report potential health care antitrust violations.

The portal, HealthyCompetition.gov, aims to advance
government efforts to boost competition in health care markets, and
aligns with the Biden-Harris Administration’s recent announcement about cracking down on
anticompetitive practices in health care.

Assistant Attorney General Jonathan Kanter, of the DOJ’s
Antitrust Division, stated in a press release that the portal would
“allow the [DOJ and FTC] to collaborate early and often,
helping to promote economic opportunity and fairness for all.”
FTC Chair Lina M. Khan agreed, stating that “[t]his joint
initiative between FTC, DOJ and HHS will provide a crucial channel
for the agencies to hear from the public, bolstering our work to
check illegal business practices that harm consumers and workers
alike.” HHS Secretary Xavier Becerra explained that the
agencies understand it is their “responsibility to stop
monopolistic, anti-competitive practices that undermine the
delivery of health care to Americans. The information provided by
the public will help to root out these behaviors.”

Complaints submitted through the portal will be reviewed by the
DOJ Antitrust Division and FTC. Those complaints rising to the
level of “sufficient concern” under federal antitrust
laws will be escalated for further investigation by the appropriate
agency.

The portal homepage provides several examples of health care
business practices that can hinder competition:

• Roll-ups or serial acquisitions – a practice of making a
  sequence of relatively minor acquisitions that, in their totality,
  result in a consolidation or acquisition.




• Collusion or price-fixing among competitors.




• Consolidations that significantly lessen competition.




• Anti-tiering and anti-steering clauses that prevent health
  insurers from providing discounts.




• Joint ventures that inappropriately inhibit innovation,
  quality, or access.




• All-or-nothing clauses that require health insurers to contract
  with all the provider’s facilities.




• Use of competitor data to monitor rivals or their
  customers.




• Tactics that delay generic medicines from being marketed,
  including making minor modifications to a drug with an expiring
  patent, paying manufacturers to delay producing generics, or
  improperly listing patents in the Orange Book, the Food and Drug
  Administration’s annual publication of approved drug products
  with therapeutic equivalence evaluations.




• Exclusive contracting that prevents buyers from purchasing from
  other sellers or price parity contract provisions that prevent
  sellers of health care services from offering lower prices to other
  competing buyers.




• Imposing unnecessary provider accreditation or recertification
  requirements that reduce the number of providers or make it more
  expensive to practice medicine.




• Written or verbal policies that limit consumer choice or
  employee wages. For example, non-compete agreements prevent health
  care providers from working for a competitor for a specific time in
  a set geographic location.¹ No-poach and no-solicitation
  agreements made between competitors to not pursue each other’s
  employees also suppress wages and benefits.

The portal homepage also lists federal antitrust laws and
discusses how each promotes healthy competition in the health care
sector, including:

• The Sherman Act makes it a
  criminal offense to monopolize or enter into certain agreements,
  like those to fix prices or wages, rig bids, or allocate customers.
  The Sherman Act also bans predatory pricing that aims to set prices
  so low as to drive competitors out of business, and then raise
  prices when competition is lessened.




• The FTC Act forbids unfair or
  deceptive practices from companies.




• The Clayton
  Act prohibits mergers that substantially
  lessen competition, or to enter into tying agreements – those
  that force a customer to purchase one product before they can
  purchase another.




• The Robinson-Patman Act bans
  charging competing buyers’ different prices for the same
  commodity strictly to give favored customers an edge, and not for
  increased efficiency or to meet competitors offerings.

As a result of the new initiative, we can expect to see more
complaints regarding possible antitrust violations. As many
unlawful anticompetitive actions are not overt, the portal could
raise awareness to discreet offenses. For example, restrictive
covenants on employment, like no-poach and non-compete agreements,
are often made verbally and may be difficult for the government to
learn of, and identifying these limitations on employment may
become of greater import given recent FTC action banning
non-competes. Additionally, the portal, in working with the public
in a user-friendly format, can be expected to lead to more health
care antitrust investigations and potential challenges, especially
for those transactions that do not trigger notification under the
Hart-Scott-Rodino Act (“HSR”) and
Clayton Act.

This joint action, along with the FTC and DOJ withdrawal of
prior guidance policy statements, will likely cause uncertainty and
confusion within the health care industry. The DOJ, in February
2023, withdrew three statements discussing the best
way to promote competition and transparency in health care. The FTC
also announced the withdrawal of two statements with similar
guidance on health care antitrust best practices in July. Most
recently, the FTC withdrew prior statements professing the
benefits of pharmacy benefit managers in reducing costs to
consumers by negotiating rebates with drug manufactures on their
behalf. Both agencies state that transactions need a case-by-case
analysis and that outdated guidance no longer reflects the current
marketplace. However, even in the wake of changes and uncertainty
in antitrust policy statements, the major federal antitrust laws,
including the Sherman Act, the Clayton Act, and the FTC Act, remain
unchanged in their statutory language or application.

Footnote

1. On April 23, 2024, the FTC issued a final rule banning noncompete
clauses. Existing noncompete clauses for all but the 0.7% of
employees who are senior executives will no longer be enforceable
after the final rule’s effective date, 120 days after its
publication in the Federal Register.

Public Portal To Promote Healthy
Competition

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