State Antitrust Enforcement: New Laws, New Potential Legislation, and New (and Wider) Areas of Focus
As detailed in our healthcare merger matrix, many states have focused their attention on the healthcare industry. This is still the case today in New York where a broad range of proposed transactions involving health care entities could be subject to filing requirements and suspensory rules before they can close. As detailed in our healthcare merger matrix, many states have focused their attention on the healthcare industry, and that continues to be the case, for example, in New York, where a broad range of proposed transactions involving health care entities could be subject to filing requirements and suspensory rules before they can close.
Moreover, and as detailed below, recently adopted laws and legislation under consideration in certain states are not limited to transactions involving healthcare providers or payors, nor are such developments limited to “blue” (politically more liberal) states, with Arkansas, Texas, Utah, and West Virginia, among others, undergoing or considering substantial expansions of their respective antitrust laws.
Arkansas Adopts Law Banning Pharmacy Benefit Managers from Owning Pharmacies
On April 16, 2025, Governor Sarah Huckabee Sanders signed HB 1150 into law, which will prohibit pharmacy benefit managers (“PBMs”) from owning pharmacies. This Arkansas law, the first of its type, prohibits pharmacy benefit managers from acquiring a direct or an indirect interest in or holding a permit to retail sell drugs or medicines. It will take effect on January 1, 2026.
California considers expansive new antitrust laws
In 2020, the California Legislature asked the California Law Review Commission to review and recommend revisions of the state’s competition law, i.e. the Cartwright Act. The CLRC, as a result, has recommended significant revisions to California’s antitrust laws. The CLRC determined that California should have its own independent merger control regime. (Today, the state can only challenge deals under federal Clayton Act). Most notably, the CLRC proposed that California become more aggressive when it comes to challenging proposed transactions by adopting a lesser standard to challenge deals than the federal standard, which requires the FTC or DOJ to provide that it is more likely than not that a deal would substantially lessen competition.
Washington State Enacts First-in-the-Nation General Premerger Notification Law; Colorado, D.C., Hawaii, Nevada, Utah, and West Virginia Considering Similar Legislation
The state of Washington became the first state to enact a state-level general premerger requirement. Many states have industry-specific merger notification laws, but this is the state’s first general premerger requirement. Similar legislation is being considered in California, Colorado, the District of Columbia (DC), Hawaii Nevada Utah and West Virginia. Similar legislation is under consideration in California, Colorado, the District of Columbia, Hawaii, Nevada, Utah and West Virginia.
Starting July 27, 2025, any person that files a federal Hart-Scott-Rodino (“HSR”) filing must also submit contemporaneously a copy of the HSR form to the state if the person meets one of three criteria:
the person’s “principle place of business” is in Washington; or
the person (or a person it controls directly or indirectly) has annual net sales in Washington for the goods or services involved in the proposed transaction that are at least 20% of the Federal HSR size of transaction filing threshold (at present, 20% is $25,280,000); or
- the person is a healthcare provider or provider organization in Washington (filing already required under Washington’s existing healthcare transaction law).
- All required Washington filers must submit a copy of their federal HSR form to the state. Filers who have their principal place of business in Washington are also required to submit the additional documentation filed with an HSR. The state can, on request, require that any filer submit the additional documentation material, even if the principal place of business does not reside in Washington. The state filing does not have a filing fee and there is no suspensory period. However, failure to file may result in a civil penalty of up to $10,000 per day of noncompliance.
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We can now definitively say that the growing state-level interest in becoming active participants in the review process for transactions that impact their state is part of a long-term secular trend. No matter their political leanings, many states no longer sit back and let the FTC or DOJ take enforcement decisions which can have a dramatic impact at the state-level. In the months and the years to come, we expect more states to enact antitrust laws or antitrust-related laws that are independent and possibly even more stringent that the federal antitrust regime. These state regimes will no longer be an afterthought but will require full attention from parties who are considering transactions that could be covered by these new laws.
