On July 9, 2021, President Biden issued an “Executive Order on Promoting Competition in the United States Economy” (the “Executive Order”) that seeks to lower prices for consumers, raise wages for workers and to promote innovation and economic growth. Noting that “[r]fierce competition is essential to preserving America’s role as the world’s largest economy, âthe Order points out that in recent decades, American industries have consolidated, competition weakened and racial disparities , income and wealth have increased.
The ordinance emphasizes that it is the policy of the Biden administration to enforce the country’s antitrust laws to combat these problems, challenge transactions that threaten to increase market concentration and support related aggressive legislative reforms. To reinforce these efforts, the Order is introducing a large-scale government effort with seventy-two initiatives to be taken by more than a dozen federal agencies. It is important to recognize that the College does not change antitrust laws; rather, it signals increased oversight and enforcement, particularly in the area of ââhealth care.
It should be noted that the executive order establishes a “White House Competition Council” within the president’s executive office, which will work to strengthen the federal government’s competition efforts. Headed by the President’s Assistant for Economic Policy and the Director of the National Economic Council, the White House Competition Council also consists of the heads of various agencies and offices.
The Order places particular emphasis on the health sector, noting, among others, the following concerns:
The high cost of prescription drugs and health services, which exceeds those of other countries;
Hospital consolidation which resulted in inadequate or expensive health care options; and
Competition inhibited for generic drugs and biosimilars, resulting in particular from legal red tape such as patent laws.
The order also notes concerns about non-compete agreements, directing the chairman of the Federal Trade Commission (“FTC”) to work to exercise the regulatory power of the FTC to restrict the use of such “unfair” agreements. Which can limit the mobility of workers. While it is not clear what the application might look like at this time, non-compete agreements are very common in physician employment contracts and these guidelines could have important implications for hospital systems. , the practices of physicians and other health care providers.
To address these issues, the ordinance describes the methods by which the Biden administration aims to manage these concerns in the healthcare space, which can be grouped into three distinct categories:
Prescription drugs and hearing aids
The order requires the secretary of the Department of Health and Human Services (âDHHSâ):
Submit a report within forty-five days of issuance of the order to the White House Competition Council regarding efforts to tackle excessive prescription drug prices and improve pharmaceutical supply chains, to reduce the prices paid by the federal government for drugs and address recurring pricing issues;
Reduce prices and improve access to prescription drugs and biologics while striving to make their approval process more transparent and efficient;
Work with the Chairman of the Federal Trade Commission (âFTCâ) to identify and address efforts to impede competition from generic drugs and biosimilars;
Respond to Federal Drug Administration concerns about the patent system and the delay in competition for generic drugs and biosimilars; and
Prepare for Medicare and Medicaid coverage for interchangeable biologics.
In addition, the ordinance specifies that:
The Food and Drug Administration Commissioner will work to develop Section 804 import programs to reduce the cost of covered products, making it easier to import prescription drugs from Canada; and
The FTC will exercise its regulatory power to reduce unfair anti-competitive behavior or agreements in the prescription drug industries, such as agreements to delay market entry of generic drugs or biosimilars (also referred to as “pay for” agreements. delay â).
The order also recognizes the high cost and lack of access to hearing aids, calling on the DHHS to issue proposed rules within 120 days, allowing over-the-counter hearing aids to be sold.
The fact sheet accompanying the order says that due to largely unmonitored hospital consolidations, the ten largest healthcare systems in the United States now control a quarter of the market. In order to ensure convenient and affordable care for all citizens, the College calls on the Department of Justice and the FTC to fairly and vigorously enforce antitrust laws and to review and consider potential revisions to the horizontal merger guidelines and vertical. Following the order, FTC Chairman Lina Khan and Acting Deputy Antitrust Attorney General Richard A. Powers issued a statement stressing that “merger guidelines must reflect economic realities. current and empirical learning âand that they mustâ steer merger review authorities with the skepticism required by law.
The ordinance also calls on the DHHS to support existing price transparency initiatives for hospitals, other providers and insurers as well as any new initiatives or modifications, and to complete the implementation of the legislation to deal with surprise billing of consumers. hospitals.
According to the fact sheet, consumers have little choice in health coverage due to consolidation and even when consumers have a choice, it is difficult to shop in comparison due to the differences in the plans offered. . As a result, the Order directs DHHS to implement standardized options in the national health insurance market.
The ultimate question becomes: what is the real impact of this Order? While the results of the College’s prescription drug and health insurance efforts remain to be seen, the effects of antitrust enforcement in the healthcare industry have already begun to intensify. In January 2020, FTC Commissioner Christine Wilson said the FTC “intends to challenge every hospital merger that will produce anti-competitive effects.” The FTC kept that promise. Recently, the FTC has continued an active healthcare enforcement program, including challenging several proposed hospital deals.
On November 12, 2020, the FTC filed an administrative complaint to block the $ 350 million acquisition by Methodist Le Bonheur Healthcare (“Methodist”) of Memphis, Tennessee, of Tenet Healthcare Corporation, based in Dallas, Texas ( âTenetâ): Saint Francis Hospital-Memphis and Saint Francis Hospital-Bartlett (collectively, âSaint FranÃ§oisâ). According to the FTC’s complaint, “Methodist and Saint Francis are two of only four providers of general hospital acute inpatient care services in the Memphis Metropolitan Statistical Area” and the proposed transaction “would significantly reduce competition in the region.” The FTC alleged that the proposed transaction would “immediately eliminate” direct competition between Methodists and St. Francis, increase Methodist bargaining power with commercial insurers, and improve Methodists’ ability to negotiate more favorable repayment terms.
While Methodist and Saint Francis initially asserted in their November 27, 2020 response to the complaint that competition would in fact be “increased rather than decreased” as a result of the proposed transaction, and noted that the “degree of competition between Saint Francis and Methodist is significantly lower than their respective market shares suggest, as clearly illustrated by historical natural experiments and other evidence, âthey ultimately made the decision to cancel the transaction, citing the FTC’s efforts. to block acquisition.
Additionally, on December 3, 2020, the FTC filed an administrative complaint to prevent New Jersey-based Hackensack Meridian Health, Inc. (âHackensackâ) from acquiring Englewood Healthcare Foundation (âEnglewoodâ), an independent hospital for nonprofit and healthcare system located in Bergen County, New Jersey. In the complaint, the FTC said the proposed transaction would strengthen Hackensack’s dominant position in Bergen County “by giving it control over three of the six general acute inpatient hospitals in Bergen County.” The proposed transaction would eliminate “face to face” competition between Hackensack and Englewood, “leading to higher prices for healthcare and reduced incentives to compete on quality and access.” Conversely, Englewood asserted that the transaction “would result in substantial pro-competitive benefits, including, but not limited to, merger-specific price savings, cost synergies and other pro-competitive effects.” With an administrative trial set to start on August 16, 2021, many are eagerly awaiting the outcome.
Although the FTC’s winning streak for hospital merger challenges recently came to an end following a vote to voluntarily dismiss a challenge of a proposed merger of two healthcare systems in the northern suburbs of Philadelphia, Thomas Jefferson University and the Albert Einstein healthcare network, the FTC is not losing ground in its continued scrutiny of hospital mergers proposed. In January of this year, the FTC also announced a retrospective study to analyze the effects of the consolidation of physician groups and healthcare facilities that occurred from 2015 to 2020. The monitoring of competition in the healthcare sector is a hot topic, and this recently released decree will add further fuel to the fire.
We continue to actively monitor these issues. For any questions or assistance, please contact our experienced team of antitrust and healthcare law practitioners.
 FACT SHEET: Executive Order on Promoting Competition in the U.S. Economy, White House (July 9, 2021).
 See FACT SHEET.
 Ms Khan was sworn in as commissioner and president of the FTC on June 15, 2021. A permanent deputy attorney general for the antitrust division has yet to be appointed.
 See FACT SHEET.
 See also https://www.nelsonmullins.com/idea_exchange/blogs/healthcare_essentials/all/the-ftc-and-doj-adjust-certain-antitrust-oversight-processes-in-response-to-covid-19 (addressing others ways the FTC has adapted to the COVID-19 pandemic.)
 The Le Bonheur Healthcare & Saint Francis Hospitals Methodist merger is canceled (December 23, 2020).
 Response and Defenses of the Respondent Englewood Healthcare Foundation, (December 17, 2020).
 The FTC will study the impact of mergers of physician groups and healthcare facilities (January 14, 2021).
Copyright Â© 2021 Nelson Mullins Riley & Scarborough LLPRevue nationale de droit, volume XI, number 199