Last Tuesday, February 27, 2018, representatives of CVS Health and Aetna went before the House Judiciary Committee Subcommittee on Regulatory Reform, Commercial, and Antitrust Law (“Subcommittee”) to argue in favor of CVS Health’s recently proposed acquisition of Aetna.[1] The Hearing, “Competition in the Pharmaceutical Supply Chain: the Proposed Merger of CVS Health and Aetna,” has drawn significant attention from stakeholders in the healthcare marketplace who are looking at the testimony and questions as an indicator of the current Congressional mood regarding (i) the antitrust/anticompetitive concerns raised by the transaction’s detractors, and (ii) the pro-consumer benefits (e.g., reduction in healthcare care costs and the transformation of the CVS Pharmacy locations into community medical hubs for primary care and basic procedures) identified by the transaction’s supporters.
Continue Reading Proposed CVS Health-Aetna Acquisition Holds Strong in Congressional Hearing

On April 28, 2017, the U.S. Court of Appeals for the D.C. Circuit upheld a February 8, 2017 decision by the U.S. District Court for the District of Columbia to block the $54 billion acquisition of Cigna Corp. by Anthem, Inc.. U.S. et al. v. Anthem Inc. et al., case number 17-5024, U.S. Court of Appeals for the District of Columbia Circuit.
Continue Reading Has the Acquisition of Cigna Corp. by Anthem, Inc. Been Relegated to the Dustbin of History? Stay Tuned!

The antitrust injury and antitrust standing defenses/doctrines are alive and well in healthcare.  A recent case, SCPH Legacy Corp. et al. v. Palmetto Health et al., shows that a competitor is not always the most legally appropriate plaintiff to bring an antitrust case, especially when the competitor’s alleged harm stems from increased competition.  This article explains the court’s reasoning and makes some predictions for similar arguments in the future.
Continue Reading Antitrust Not Always Available in Competitor Disputes in the Healthcare Sector

In what will undoubtedly be seen by all interested parties as a significant setback in the Federal Trade Commission’s active opposition to potentially anticompetitive healthcare collaborations, the FTC voted unanimously on Wednesday to dismiss its challenge to Cabell Huntington Hospital’s acquisition of St. Mary’s Medical Center – two hospitals serving patients in the Huntington area of West Virginia.  While the FTC continues to believe that the merger will result in significant anticompetitive harm, it chose to abandon the fight in light of the recent passage of West Virginia Senate Bill 597 (SB 597).
Continue Reading FTC Stands Down in Latest Head-to-Head Battle Between Federal and State Oversight of Healthcare Collaborations

On June 9, 2016, the Antitrust Division of the United States Department of Justice (“DoJ”) filed a complaint against the Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health Care System (“CHS”) in the United States District Court for the Western District of North Carolina. (United States of America and State of North Carolina v. Charlotte Mecklenburg Hospital Authority). The complaint accuses CHS of using “contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less expensive healthcare services offered by CHS’s competitors.” (Complaint, Preamble) In effect, the complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using “steering” restrictions, which would otherwise be used to steer their insured patients to lower cost healthcare providers, including lower-cost hospitals, in exchange for lower premiums in so-called “narrow network” insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS.
Continue Reading U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts

The FTC just suffered a major setback in its concerted efforts to challenge the ever growing number of consolidations in the healthcare industry, failing to secure a preliminary injunction to block a hospital merger in central Pennsylvania.  In a decisive and strongly-worded opinion, the Honorable John Jones III of the Middle District of Pennsylvania concluded that (1) the FTC had fatally alleged an unrealistically narrow geographic market; and (2) the merger was likely to benefit (not harm) consumers, in part by allowing the merged entity to remain competitive in the new healthcare environment which “virtually compels” consolidations.  Federal Trade Commission et al. v. Penn State Hershey Med. Ctr. et al., Case No. 1:15-cv-02362 (May 9, 2016, M.D. Penn).
Continue Reading FTC Suffers Setback in Campaign to Slow the Rising Tide of Healthcare Consolidations

In a joint statement issued by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (collectively, the “Agencies”) late last month, the Agencies suggested Virginia’s Certificate of Public Need Work Group (“Work Group”), currently convened, consider repealing or retrenching Virginia’s Certificate of Public Need (“COPN”) law.[1]
Continue Reading Reconsideration of Certificate of Need in Virginia

On April 22, 2015, the Federal Trade Commission submitted a public letter to the New York State Department of Health (DOH) expressing “strong concerns” over state regulations offering to provide antitrust immunity to certain healthcare collaborations undertaken with DOH’s approval and supervision.  This letter is consistent with the FTC’s continued opposition to grants of immunity from federal antitrust laws based on state action.  The letter also presents a meaningful opportunity to re-evaluate the interplay between state and federal antitrust enforcement authority, and the related doctrine of state action immunity, particularly in the healthcare arena which has seen an unprecedented spike in collaborative arrangements following passage of the Affordable Care Act.
Continue Reading State Regulatory Scheme Offering Antitrust Immunity to Healthcare Collaborations Creates Tension Between Federal and State Antitrust Enforcement

The Massachusetts Attorney General and others are currently advocating for legislation that would accord greater legal weight to the findings of an independent state agency, the Health Policy Commission, on the effects of proposed mergers and acquisitions.[1]  Currently, a “Cost and Market Impact Review” report is referred to the Attorney General’s Office if the Health Policy Commission determines that a transaction will likely result in a provider gaining a dominant market share, higher prices for services and increased medical spending. Under the legislation, such a report would be prima facie evidence that a transaction violates the Massachusetts Consumer Protection Act and could be used in an action brought by the Attorney General to block the transaction pending the outcome of litigation.
Continue Reading State Oversight of Anticompetitive Activity in Healthcare: Is a New Wave Ahead?