Looking Back and Forward: Healthcare Antitrust under a New Administration – What’s the same and what changes?

President Trump took office on Monday and promised swift action on many fronts. Andrew Ferguson is the new chair of the Federal Trade Commission (FTC), and Lina Khan, who was previously chair, will be stepping down soon. At the Department of Justice, Antitrust Division (“DOJ”), proposed AAG Gail Slater will need to be confirmed by the Senate before she can take the helm.

Overall, our view is that antitrust enforcement in the new administration will be complicated. However, while the Biden administration has been criticized in some quarters for overreach in antitrust enforcement, there has been bipartisan consensus that certain industries, including Healthcare, have become too concentrated.

Healthcare Antitrust Enforcement Under Biden: Active to the Very End

The Biden administration’s FTC and DOJ were extraordinarily active in the healthcare space, not just bringing enforcement actions against various industry participants (some of which were brought on the literal last business day of the administration), but putting forth new guidance and rules, while withdrawing others. Some examples of the Biden administration’s healthcare-focused antitrust program included:

1. Merger Enforcement: The Biden FTC and DOJ adopted a stringent approach toward healthcare mergers, challenging transactions that threatened to excessively consolidate market power. The Biden administration’s healthcare-focused antitrust program included:
2. Merger Enforcement: The Biden FTC and DOJ adopted a stringent approach toward healthcare mergers, challenging transactions that threatened to excessively consolidate market power. The agencies were less likely to settle merger disputes with remedies and often chose to block transactions outright in order to preserve competition. The administration scrutinized the role of private equity in the healthcare industry, particularly concerning acquisitions that could lead to monopolistic practices.
3. Conduct Investigations: The administration targeted anticompetitive practices in the healthcare and pharmaceutical industries, including “pay-for-delay” agreements and monopolistic behaviors that kept drug prices high. Notably, the FTC pursued investigations into pharmacy benefit managers (“PBMs”), examining their role in drug pricing and their potential conflicts of interest and releasing a staff interim report in the last few days of the outgoing Biden administration.

Withdrawal of Antitrust Healthcare Policy Statements and other Guidance

: The agencies withdrew longstanding healthcare-specific policy statements that provided firms with clear guidance, including explicit safe harbors, about how to engage in certain conduct and transactions in the healthcare industry without running afoul of the antitrust laws. The withdrawal of the policy statements has introduced uncertainty to companies operating in the healthcare space and left them vulnerable to antitrust scrutiny for practices that were previously expressly permitted.

1. What will Federal Healthcare Enforcement Look Like Now? Here are three areas to watch in the new administration:More Guidance (Please)? Below, are three specific areas to watch in the new administration:
2. More Guidance (Please)?: We are curious to see whether the old Healthcare Statements or Antitrust Guidelines for Collaborations Among Competitors (“Collaboration Guidelines”), which are highly relevant to the antitrust analysis of healthcare collaborations and joint ventures, are reinstated or new ones are introduced in this Trump administration. The two Republican FTC Commissioners under the Biden administration including the current FTC Chair Andrew Ferguson, dissented on the previous decision to withdraw the Collaboration Guidelines. This decision was criticized heavily by conservative antitrust commentators. The healthcare industry is likely to remain in the crosshairs of antitrust enforcement. However, a Trump Administration will likely be more pragmatic and business-friendly in its enforcement approach. Reinstating guidance for industry players would not be surprising.
3. “Middlemen” Still the Bogeymen?: We anticipate that the Trump administration will continue investigations into the role of middlemen in the healthcare industry–particularly PBMs–begun under the Biden administration. Trump has previously criticized PBMs’ role in inflating the price of drugs. We will likely continue to see efforts to investigate these entities. However, whether either agency will pursue novel theories of antitrust damage remains to be determined. The new Guidelines are only in place for a year but both Agencies have successfully brought several lawsuits under them. Andrew Ferguson, the new FTC chair, said that, even though they were highly controversial, they shouldn’t be categorically repealed. I don’t believe we should get stuck in a cycle of rescinding policies every time the chairmanship is changed. The guidelines will become useless to everyone if everyone thinks that they just embody the very particular preferences of a particular party.” But he noted in the same interview, “I am open to reforming them.”[o]CONCLUSION

Although we expect antitrust enforcement trends in healthcare to be broadly consistent between administrations, it is the differences that will be telling as we move forward into the Trump Presidency. The differences between administrations will be telling as we move forward into the Trump Presidency. Although we expect antitrust enforcement trends in healthcare to be broadly consistent, it is the differences that will be telling.