Increased scrutiny of the healthcare industry from antitrust agencies such as the Federal Trade Commission and US Department of Justice emphasize the necessity of compliance measures to mitigate antitrust risk that can negatively impact the closing of transactions. This article explores the critical role of clean team agreements (CTAs) in managing antitrust risks during the due diligence process of healthcare transactions. The paper provides a comprehensive analysis of how CTAs can be structured to securely handle competitively sensitive information, ensuring that such documents are only accessed by designated personnel under strict guidelines. Through a variety of hypothetical scenarios, the article demonstrates the application of CTAs in situations involving direct competitors, labor competition, and different geographic markets. These examples underscore the importance of tailoring CTAs to the specific competitive dynamics and regulatory environments of each transaction, ensuring both legal compliance and transactional efficiency in the healthcare sector.
New DOJ Task Force to Target ‘Multisided Giants’ in Healthcare
The US Department of Justice’s (DOJ) announcement of the formation of a new healthcare task force signals an even stronger emphasis on addressing competition issues in the healthcare industry. Large, multisided platforms involved in multiple sectors (e.g., insurance companies acquiring physician practices and/or essential healthcare IT and data services) are a key target for enforcement.
WHAT HAPPENED:
- On May 9, 2024, the DOJ announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (HCMC). The HCMC will be tasked with guiding and developing policy advocacy and conducting investigations – and ultimately civil and criminal enforcement actions –in healthcare markets.
- US Assistant Attorney General Jonathan Kanter stated that the HCMC “will identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry.” The press release specifically identified the following non-exhaustive set of issues that will be priority areas for the HCMC: payer-provider consolidation, serial acquisitions, labor, quality of care, medical billing, healthcare IT services, and the access to and misuse of healthcare data.
- In announcing the formation of the task force at a Washington Post Live event, Kanter highlighted the changing nature of the healthcare marketplace. In what he coined the “platformization of healthcare,” patients and consumers now interact with “multisided giants, intermediaries that have a coordinated stack of businesses that flow together, including payers, including providers, including PBMs, claims processing, banks” which have become the “gatekeepers of our healthcare system.” According to Kanter, it is crucial that the Antitrust Division adapt its enforcement policies and strategies in healthcare to reflect these new market realities.
- The HCMC will be led by Katrina Rouse, an antitrust prosecutor at the DOJ since 2011 who previously served as chief of the Defense, Industrials, and Aerospace Section and a trial attorney in the Healthcare and Consumer Products Section. Rouse will oversee a team of civil and criminal prosecutors, economists, experts in healthcare and technology, data scientists, investigators and policy advisors.
WHAT THIS MEANS:
- The antitrust enforcement agencies have used similar task forces in the past to focus resources and accumulate subject matter expertise. For example, the DOJ’s Procurement Collusion Strike Force has been successful at investigating and pursuing government contracting cases.
- The launch of the HCMC reflects the antitrust enforcement agencies’ increasing efforts to respond to changing dynamics in the healthcare space and address the potential harmful results of these changes on patients, healthcare workers and communities. In March 2024, the DOJ, Federal Trade Commission (FTC) and US Department of Health and Human Services (HHS) jointly launched a cross-government inquiry into the increasing role of private equity firms in healthcare transactions and whether such firms prioritize maximizing profits at the expense of healthcare quality and affordability.
- Of note, the DOJ, rather than the FTC, typically investigates mergers involving health plans and contracting issues among health plans and providers. Therefore, healthcare industry participants, [...]
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Antitrust M&A Snapshot | Q1 2024
Topics covered in this edition:
- The Federal Trade Commission (FTC) and US Department of Justice have begun implementing the 2023 Merger Guidelines in their enforcement actions
- During a virtual workshop, the FTC highlighted its focus on private equity (PE) acquisitions of healthcare service providers and expressed concerns about PE in healthcare
- Artificial intelligence’s antitrust implications continue to draw FTC scrutiny
- The European Commission (EC) used its super-simplified procedure in about one-third of all merger decisions in Q1 2024
- EC regulators are taking an increasingly vigilant approach to merger control review to ensure market dynamics remain pro-competitive and pro-consumer
What California’s DOJ Said at the 2024 Antitrust Law Section Spring Meeting
The American Bar Association Antitrust Law Section’s annual Spring Meeting earlier this month featured federal, state and international enforcers discussing a variety of antitrust and competition issues across jurisdictions. Paula Blizzard, the California Department of Justice’s antitrust chief, provided insights into the California attorney general office’s current and upcoming enforcement activities.
Blocked JetBlue-Spirit Deal Illustrates New Antitrust Approach
As reflected in the December 2023 merger guidelines, the Federal Trade Commission and the US Department of Justice have changed the way they think about out-of-market effects, i.e., competitive effects that arise outside the relevant market.
In this Law360 article, Lisa Rumin and Anthony Ferrara unpack this new approach, which was prominently demonstrated during the JetBlue Airways-Spirit Airlines merger, and provide practical considerations on the implications for firms contemplating mergers and acquisitions.
