FTC, DOJ and HHS Work to Lower Health Care and Drug Costs, Promote Competition to Benefit Patients, Health Care Workers

Anticompetitive acquisitions and practices can chill fair competition, leading to higher health care costs, degraded working conditions, and less innovation across the health care and pharmaceutical industries. Through regulatory and legal actions, the Federal Trade Commission (FTC), Department of Justice (DOJ), and Department of Health and Human Services (HHS) are each working to promote competition to lower health care costs for families and taxpayers and improve the quality and availability of health care for patients.

All three agencies are working together to lower health care costs, including partnering on new initiatives which include a joint Request for Information to seek input on how private-equity and other corporations’ control of health care is impacting Americans. The FTC, DOJ and HHS will engage in data-sharing to the extent possible, with each agency  naming health care competition officers to help lead these efforts.

Recent actions spearheaded by the agencies include:

Federal Trade Commission

“Decades of corporate consolidation has contributed to soaring costs across health care markets, with Americans now paying more for everything from life-saving medicines to a hospital visit,” said FTC Chair Lina M. Khan. “Safeguarding fair competition and rooting out unlawful business practices in health care markets is a top priority for the FTC. We will continue to fire on all cylinders to protect patients, health care workers, and competition in these critical markets.”

• Orange Book Policy Statement + Challenges – In September, the FTC, supported by the Food and Drug Administration (FDA), issued a policy statement warning pharmaceutical companies that make and sell brand-name drugs that they could face legal action if they improperly list patents in the FDA’s catalog of “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the “Orange Book.” Such improper listings may delay competition and raise prices for life-saving products like asthma inhalers. In November, less than two months after the policy statement was issued, the FTC challenged more than 100 patents held by manufacturers of brand-name asthma inhalers, epinephrine autoinjectors, and other drug products as improperly or inaccurately listed in the FDA’s Orange Book.
• Proposed Noncompete Rule – In January, the FTC proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans, including those working in the health care industry. Consumers would save up to $148 billion annually on health care costs under the proposed rule according to FTC estimates.
• U.S. Anesthesia Partners/Welsh Carson Lawsuit – The FTC sued U.S. Anesthesia Partners, Inc. (USAP), the dominant provider of anesthesia services in Texas, and New York-based private equity firm Welsh, Carson, Anderson & Stowe, alleging the two executed a multi-year anticompetitive scheme to consolidate anesthesiology practices in Texas, drive up the price of anesthesia services provided to Texas patients, and boost their own profits.
• Amgen/Horizon Settlement – In September, the FTC reached a proposed consent order with Amgen Inc. to address the potential competitive harm that would result from Amgen’s $27.8 billion acquisition of Horizon Therapeutics plc.

• Eyeglass rule – The FTC proposed updating its Ophthalmic Practice Rules, known as the Eyeglass Rule, to ensure ophthalmologists and optometrists provide patients with a copy of their prescription immediately after the completion of a refractive eye exam to help facilitate consumers’ ability to choose where to get their eyeglass prescriptions filled.
• John Muir Health/ Tenet Healthcare Lawsuit – In November, the FTC sued to block John Muir Health’s proposed $142.5 million deal to acquire sole ownership of San Ramon Regional Medical Center, LLC from current majority owner Tenet Healthcare Corporation, alleging the deal will drive up health care costs.
• Surescripts Settlement – The FTC reached a settlement with Surescripts that resolved charges alleging that Surescripts used anticompetitive tactics to illegally monopolize two e-prescription drug markets.
• IQVIA/ Propel Media Lawsuit – The FTC sued to block IQVIA Holdings Inc. from acquiring Propel Media, Inc. alleging that the proposed acquisition would give IQVIA a market- leading position in programmatic advertising for health care products, namely prescription drugs, to doctors and other health care professionals.
• Data-Sharing – The FTC is working with its partners at the Department of Health and Human Services and Justice Department to engage in data-sharing that will help identify potentially anticompetitive transactions that might otherwise evade review.
• Counsel for Health Care– The FTC will appoint a Counsel for Health Care to lead interagency and policy efforts on health care competition.

Department of Justice

“Protecting and promoting competition in health care markets is among the Division’s top priorities,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “Absent competition, real people suffer real harms. Those harms are especially grave when we’re talking about the medical care people depend on to live their lives. We are committed to weeding out anticompetitive practices and market consolidation that hinder Americans’ access to quality care at affordable rates, or deprive health care workers of fair wages and opportunity.”

• Reinvigorating Antitrust Enforcement to Safeguard Competition in Healthcare Markets
  • United States v. Teva Pharmaceuticals – In a criminal case involving inflated drug pricing, the Division recently obtained the largest penalty ever imposed for a purely domestic cartel—over $200 million. The Division also secured – for the first time ever – $50 million in free pharmaceuticals for people in need, along with a requirement that the wrongdoers divest products that were at the heart of the illegal conspiracy.
  • United States v. Harwin – In August, the Division secured a guilty plea by a medical oncologist and company executive to conspiring to allocate oncology treatments for cancer patients in Southwest Florida.
  • United States v. Lopez – In September, a federal grand jury returned a superseding indictment charging a health care staffing executive with conspiring to fix the wages of Las Vegas nurses and then fraudulently concealing that conspiracy and the government’s investigation. Trial is scheduled to begin in October 2024.
  • United States v. VDA OC LLC –Last year, a health care staffing company was sentenced for entering into and engaging in a conspiracy with a competitor to allocate employee nurses and to fix the wages of those nurses.
  • Challenging Interlocking Directorates – The Division has reinvigorated enforcement of Section 8 of the Clayton Act, resulting in fifteen interlocking director resignations from eleven boards – including in the health care industry. A director who served simultaneously on the boards of Definitive Healthcare Corp. and ZoomInfo Technologies Inc. resigned from Definitive’s board in response to the Division’s concerns about the alleged interlock.
  • Aon plc and Willis Towers Watson Merger Abandonment – The Division filed suit to block Aon’s $30 billion proposed acquisition of Willis Towers Watson, a transaction that would have brought together two of the “Big Three” global insurance brokers and providers of health and retirement benefits consulting. In response to this enforcement action, the parties abandoned the merger.
• Advancing a Whole-of-Government Approach

• Memorandum of Understanding with HHS OIG – Last year, the Division announced a partnership with Department of Health and Human Service’s Office of the Inspector General to protect health care markets. This memorandum of understanding aims to increase coordination in information sharing, enforcement activity, and training that will strengthen enforcement of federal laws, including the full force of OIG’s exclusion authorities and the antitrust laws enforced by the Justice Department’s Antitrust Division, while ensuring the continuity of health care products and services. This partnership also supports the objectives of the President’s Executive Order on Promoting Competition in the American Economy.
  • Data Sharing – The Division is deepening its work with its partners at the Department of Health and Human Services, includingby  obtaining data that will help identify mergers and acquisitionsin health care markets that might otherwise evade review.
  • Hiring for Health Care – Given the importance of ensuring a competitive health care marketplace, the Division will appoint a Counsel for Health Care to lead interagency and policy efforts on health care competition, in addition to assisting with the Division’s enforcement work. The Division has also recently hired two renowned health care economists.

• Advocacy to Strengthen Labor Market Competition for Healthcare Workers – The Division has recently filed several statements of interest, amicus briefs, and federal agency comments regarding labor competition issues. These broad-based efforts to advocate for competitive job markets have yielded important legal rulings that extend to health care industry workers, who depend on competition to deliver competitive wages, fair conditions of employment, and the opportunity for professional growth.
  • Statements of Interest – Robinson v. Jackson Hewitt, Inc.; Fuentes v. Jiffy Lube International, Inc.; Borozny, et al. v. Raytheon Technologies Corp.; Markson v. CRST International, Inc.; In re Outpatient Medical Center Employee Antitrust Litigation; Beck v. Pickert Medical Group, P.C
  • Amicus Briefs – Giordano v. Saks & Company LLC; Illinois v. Elite Staffing, Inc.; Illinois v. Colony Display LLC; Deslandes v. McDonald’s USA, LLC
  • Comments to Federal Agencies – NLRB’s employee standard in The Atlanta Opera, Inc.

Department of Health and Human Services

“Competition in the marketplace lowers costs and spurs innovation,” said Secretary Xavier Becerra. “The Biden-Harris Administration remains laser-focused on increasing access to high-quality, affordable health care for all Americans, like by making hearing aids available for sale over the counter and lowering prescription drug costs through the Inflation Reduction Act.”

• Increasing ownership transparency – HHS, through the Centers for Medicare & Medicaid Services (CMS), has taken unprecedented action to shed light on ownership trends in health care. Today, CMS is releasing, for the first time, ownership data on Federal Qualified Health Centers and Rural Health Clinics on data.cms.gov. Making ownership information transparent benefits researchers and enforcement agencies by allowing them to identify common owners that have had histories of poor performance, analyze data and trends on how market consolidation impacts consumers with increased costs without necessarily improving quality of care, and evaluate the relationships between ownership and changes in health care costs and outcomes.

• Increasing Medicare Advantage transparency – CMS has taken steps to improve Medicare Advantage data transparency and, today, CMS is announcing a new phase of this work, which will start with soliciting information from the public early next year to strengthen CMS’ data capabilities and Medicare Advantage transparency efforts.
• Negotiating and lowering drug prices – Through President Biden’s Inflation Reduction Act, the Administration has announced 10 prescription drugs for which Medicare will negotiate prices directly with participating manufacturers. This builds on other progress to lower prescription drug costs. Individuals with Medicare can now receive certain vaccines for free under the President’s lower cost prescription drug law, which previously would have cost an average of $70 in out-of-pocket costs. The Inflation Reduction Act also capped the cost of insulin at $35 per product per month for almost four million seniors and others on Medicare with diabetes, which can lead to hundreds of dollars in savings for a month’s supply.

• Cracking down on anticompetitive and anti-consumer practices in Medicare Advantage – Earlier this year, HHS announced new steps to stop predatory marketing and steering of patients to Medicare Advantage plans that may not best meet their needs.  HHS, through CMS, proposed a rule that would, if finalized as proposed, would further restrict large insurance plans from offering brokers and agents lavish compensation—such as cash bonuses, volume bonuses, and perks, leading to steerage of patients to plans based on compensation to the broker or agent, rather than based on the patients’ best interests.
• Making hearing aids available over the counter – Under a final rule issued by the FDA, hearing aids are now on store shelves across the country—for thousands of dollars less than before. The rule is also spurring competition among providers, leading to new features and models. 
• Cracking down on nursing homes that endanger resident safety – Last month, CMS finalized a rule that will provide more information about who owns a nursing home—including whether facilities are owned by a private equity company or a real estate investment trust to allow for making more informed decisions about where to seek nursing home care.
• Reforming the organ transplant system - President Biden recently signed a bipartisan law, the Securing the U.S. Organ Procurement and Transplantation Network Act, to break up the monopoly that has controlled the Organ Procurement and Transplantation Network  for its entire nearly four decade history. HHS will harness competition with the intent to make multiple awards to different entities to benefit from best-in-class vendors and provide a more efficient system that strengthens oversight and improves patient safety.

• Developing new payment models for doctors to remain independent - Beginning July 1, 2024, the CMS Innovation Center’s Making Care Primary Model will provide a pathway for primary care clinicians to gradually adopt prospective, population-based payments that support the delivery of advanced primary care. 
• Improving transparency of hospital charges – CMS hospital price transparency regulations lay the foundation for a patient-driven health care system by making hospitals’ standard charges’ data available to the public.  Last month, CMS strengthened these regulations to require hospitals to make charges available in a more standardized manner to streamline enforcement capabilities. This will help the public learn what a hospital charges for a particular service, for third parties to develop consumer-friendly materials, for hospitals to comply, and for CMS to enforce the regulations.