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North Carolina Dentists Seek Rehearing En Banc After Losing Bid for Antitrust Immunity

by Lincoln Mayer

North Carolina’s dentists were not smiling when a three judge panel of the U.S. Court of Appeals for the Fourth Circuit sided with the Federal Trade Commission in a challenge to the State Board of Dental Examiners’ policy that only dentists could perform teeth whitening.  On July 15, 2013, the board filed a petition asking the full court to reconsider the panel’s May 31, 2013 decision.  N.C. State Bd. of Dental Examiners v. FTC, No. 12-1172.

The dispute centers on whether the state action doctrine shields the board’s policy from antitrust scrutiny.  That doctrine holds that state actors need only show that the state had a clearly articulated policy to displace competition with regulation.  However, private parties invoking the doctrine must also show that they are actively supervised by the state.  The Fourth Circuit panel concluded that since the board is composed of licensed dentists who have a financial interest in the market and are answerable to other members of the profession with a similar interest, the board needed to demonstrate active state supervision.  The board countered that it is a state agency and therefore does not need to satisfy this additional requirement.

The North Carolina State Bar, and the National Association of Boards of Pharmacy together with the North Carolina Board of Pharmacy and North Carolina Board of Physical Therapy Examiners, submitted amici briefs supporting the dental board’s petition.

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FTC’s New Chairwoman Ramirez Says Health Care Continues To Be Top Priority

by Hillary Webber

In remarks made this week at the International Competition Network annual conference, Federal Trade Commission (FTC) Chairwoman Edith Ramirez stated that health care will continue to be a top priority for the FTC.   Referring to health care and hospital mergers in particular, she said that the Commission will "guard[] against what we consider to be consolidation that may end up having adverse consequences for consumers."  The Chairwoman’s comments indicate that the recent leadership change at the FTC from former Chairman Jon Leibowitz to Chairwoman Ramirez has not altered the Commission’s priorities.

Recent months have seen a flurry of FTC activity in the courts related to health care.  For example, two FTC cases came before the U.S. Supreme Court this term — the FTC’s challenge to Phoebe Putney’s acquisition of Palmyra Park Hospital in Georgia and the FTC’s challenge to "pay-for-delay" patent infringement litigation settlements between branded and generic pharmaceutical manufacturers. 

In February, the Supreme Court ruled that the state action doctrine did not immunize Phoebe Putney’s hospital transaction from federal antitrust scrutiny, and the FTC has subsequently filed renewed motions in federal district court to stop further integration of the two hospitals even as it prepares for a full administrative hearing on the merits that will begin in August. 

A decision on the "pay-for-delay" case is expected in June.  The Supreme Court’s ruling may have a large impact on further FTC efforts against what it perceives as anticompetitive efforts to delay generic drug entry.

Health care clients considering acquisitions are advised to consult antitrust counsel early in the transaction process.  Given the FTC and DOJ’s close scrutiny of health care transactions, early advocacy before the antitrust agencies is often critical to a deal closing on schedule.  

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