June 21, 2017
The Federal Trade Commission’s recently submitted budget and plan for FY2018 indicates a shift from focusing on “protecting consumers” to “promoting competition.” The healthcare industry ranks high on the FTC’s list of industries that will receive scrutiny for anti-trust.
In order to accomplish its goals, the FTC has proposed a budget of $306 million, which is on par with its current annual budget. The agency said it plans to review and take action against “anticompetitive agreements” among healthcare providers, and to “challenge anticompetitive mergers” of hospitals, medical device manufacturers, pharmaceutical companies, and other healthcare providers that contribute to the increasing cost of healthcare.
It’s worth noting that 47% of the FTC’s enforcement actions during 2016 were healthcare-related. It successfully challenged hospital mergers in Pennsylvania (Penn State Hershey Medical Center and Pinnacle Health System) and Illinois (Advocate Health Care Network and North Shore University Health System). In both cases, the FTC convinced the court that the merger would diminish competition for acute-care hospital services.
The FTC estimates that it saved consumers more than $2.1 billion dollars in 2016, as a result of its merger enforcement activities. However, the agency may not be able to challenge mergers outside of court for much longer. If the Standard Merger and Acquisitions Review through Equal Rights Act of 2017 (H.R. 659) is passed, it would eliminate the FTC’s administrative adjudication process as it relates to merger enforcement, and force the agency to address these claims in court. The bill, introduced in January 2017 by Blake Farenthold (R-TX), recently passed the House Judiciary Committee.
For questions, comments or concerns, please contact Jennifer Duell Popovec