Public portal for the promotion of healthy competition | JD Supra

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 which allows the public to report possible antitrust violations in health care.

The portal, HealthyCompetition.gov, aims to advance the government’s efforts to increase competition in healthcare markets and aligns with the recent announcement by the Biden-Harris Administration to crack down on anti-competitive 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 [DOJ and FTC] collaborate early and often, helping to promote economic opportunity and equity for all.” FTC Chairwoman Lina M. Khan agreed, stating that “[t]his joint initiative between the FTC, DOJ and HHS will provide a crucial channel for the agencies to listen to the public, strengthening our work to check illegal business practices that harm consumers and workers.” HHS Secretary Xavier Becerra, explained that the agencies understand that it is their “responsibility to stop monopolistic and anticompetitive practices that undermine healthcare for Americans. Information provided by the public will help stamp out these behaviors.”

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

The portal’s home page provides several examples of health business practices that can hinder competition:

• Roll-ups or serial acquisitions: A practice of making a sequence of relatively minor acquisitions that, in their entirety, result in a consolidation or takeover.
• Collusion or price fixing between competitors.
• Consolidations that significantly reduce competition.
• Anti-tiering and anti-steering clauses that prevent health insurers from offering discounts.
• Joint ventures that inappropriately inhibit innovation, quality or access.
• All-or-nothing clauses that force health insurers to contract with all provider facilities.
• Using competitor data to monitor rivals or their customers.
• Tactics that delay the commercialization of generic drugs, such as making minor modifications to a drug with an expired patent, paying manufacturers to delay production of generics, or incorrectly listing patents in the Orange Book, the Food and Drug Administration’s annual publication Administration of approved pharmaceutical products with therapeutics. equivalence assessments.
• Exclusive contracting that prevents buyers from buying from other sellers or price parity contract provisions that prevent sellers of healthcare services from offering lower prices to other competing buyers.
• Impose unnecessary provider accreditation or recertification requirements that reduce the number of providers or make the practice of medicine more expensive.
• 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 specific geographic location.[1] Non-poaching and non-solicitation agreements made between competitors not to pursue each other’s employees also suppress wages and benefits.

The portal’s home page also lists federal antitrust laws and discusses how each promotes healthy competition in the health care industry, including:

• The Sherman Act makes it a crime to monopolize or enter into certain agreements, such as those to fix prices or wages, manipulate offers or assign customers. The Sherman Act also prohibits predatory pricing that aims to set prices so low that they put competitors out of business and then raise prices when competition is reduced.
• The FTC Act prohibits unfair or deceptive business practices.
• The Clayton Act prohibits mergers that substantially lessen competition or tying agreements that force a customer to buy one product before he can buy another.
• Robinson-Patman Act prohibits charging competing buyers different prices for the same merchandise strictly to give an advantage to favored customers, and not to increase efficiency or to satisfy competitors’ bids.

As a result of the new initiative, we can expect to see more complaints about potential antitrust violations. Since many illegal anti-competitive actions are not open, the portal could raise awareness of discrete crimes. For example, restrictive covenants on employment, such as non-poaching agreements and non-compete agreements, are often made verbally and can be difficult for the government to learn about, and identifying such limitations in the ‘occupation may be more important given the FTC’s recent action that prohibits non-competes. In addition, the portal, by working with the public in a user-friendly format, can be expected to lead to more health care antitrust investigations and potential challenges, particularly for those transactions that do not trigger Hart Act notifications -Scott-Rodino (“HSR”) and the Clayton Act.

This joint action, along with the FTC’s and DOJ’s withdrawal of previous guidance policy statements, will likely cause uncertainty and confusion in the healthcare industry. The DOJ in February 2023 withdrew three statements that discussed how best to promote competition and transparency in health care. The FTC also announced the withdrawal of two statements with similar guidance on antitrust best practices in health care in July. More recently, the FTC retracted prior statements that professed the benefits of pharmacy benefit managers to reduce costs for consumers by negotiating discounts with drug manufacturers on their behalf. Both agencies say transactions need a case-by-case analysis and that the outdated guidance no longer reflects the current market. However, even in the wake of changes and uncertainty in antitrust policy statements, major federal antitrust laws, including the Sherman Act, the Clayton Act, and the FTC Act, remain unchanged in their statutory language or application.

[1] On April 23, 2024, the FTC issued a final rule prohibiting non-compete clauses. Existing non-compete clauses for all but 0.7% of employees who are senior executives will cease to be enforceable after the effective date of the final rule, 120 days after publication in the Federal Register.