On December 7, 2023, the Biden Administration announced several new initiatives intended to “promote competition” in the health care sector. These initiatives reflect a broad range of concerns about rising costs in health care, including pointed references to “price gouging” and “profiteering” by private equity and big business. These initiatives build on the dozens of other regulatory efforts that President Biden ordered in his 2021 Executive Order on Promoting Competition in the American Economy. They also complement a number of enforcement actions, guidance statements, and rulemakings that the Federal Trade Commission (FTC), Department of Justice (DOJ), and Department of Health and Human Services (HHS) have taken over the past three years to promote competition in the health care sector.
Initiatives Announced
The Administration announced that HHS, FTC, and DOJ are taking steps to promote the sharing of data among themselves to identify so-called “roll-up” acquisitions, such as mergers or acquisitions that may be too small to require reporting to the FTC or DOJ under the Hart-Scott-Rodino Antitrust Improvements Act, but which nevertheless can potentially create competitive issues. This announcement builds on the FTC and DOJ’s ongoing efforts to revise the federal Merger Guidelines to specifically address the issue of “serial acquisitions” that may have a cumulative effect of lessening competition, and also continue prior efforts to promote the exchange of data between HHS and antitrust enforcers.
HHS and the Department of Commerce have released a new proposed framework for the exercise of “march-in” rights under the Bayh-Dole Act. In short, for pharmaceuticals, medical devices, or other inventions whose development was funded by taxpayers, the Bayh-Dole Act allows the federal government under certain circumstances to license the invention to a third party. The new proposed framework would, for the first time, allow the government to consider pricing as a factor in determining whether to exercise these so-called march-in rights.
Furthermore, soon, the DOJ, FTC, and HHS will issue a joint Request for Information to the public, seeking information on the topic of “corporate greed in health care.” This Request for Information will be used to identify areas for future regulatory and enforcement activity by these agencies.
Additionally, HHS, FTC, and DOJ are creating new administrative roles within their respective organizations. HHS will appoint a new “Chief Competition Officer.” And FTC and DOJ will both appoint “Counsels for Health Care,” with responsibility for leading antitrust enforcement efforts in health care. It is not immediately clear whether these positions will replace or overlap with other existing positions, such as the Director for Health Care that already exists within the FTC’s Bureau of Competition, or the Deputy Assistant Attorney General for the Healthcare and Consumer Products Section that already exists within the DOJ’s Antitrust Division.
Finally, the Centers for Medicare & Medicaid Services (CMS) is taking steps to increase the transparency of certain data it keeps about health care organizations. For the first time, CMS will publicize data about the ownership of Federal Qualified Health Centers and Rural Health Clinics. CMS will also explore ways to increase the transparency of data about Medicare Advantage plans and performance, starting with a request for information from the public on this topic to begin in early 2024.