DOJ’s Antitrust Division Withdraws Healthcare Antitrust Policy Statements

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Calling them “outdated” and “overly permissive,” the Department of Justice’s Antitrust Division on February 3, 2023, announced the withdrawal of three long-standing antitrust policy statements related to enforcement in healthcare markets:

These policy statements offered federal enforcement insights on a broad range of healthcare competition issues, including the exchange of competitively sensitive information, hospital mergers and joint ventures, and the development of multi-provider networks. In some cases, the policy statements established “safety zones” that provided industry participants a modicum of certainty as to how federal enforcers were likely to respond to market developments. For example, the agencies delineated safety zones for mergers involving at least one small hospital,[1] hospital joint ventures involving high technology or other expensive healthcare equipment,[2] and exchanges of competitively sensitive information,[3] among others. With these statements now withdrawn, the Antitrust Division indicated its intent to employ a “case-by-case enforcement approach . . . to better evaluate mergers and conduct in healthcare markets that may harm competition.”

The day prior to this announcement, Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division offered prepared remarks that focused largely, though not entirely, on how the exchange of competitively sensitive information can adversely impact competition. Mekki noted that the “safety zones were written at a time when information was shared in manila envelopes and through fax machines. Today, data is shared, analyzed, and used in ways that would be unrecognizable decades ago . . .  At bottom, we believe the healthcare industry has evolved considerably since the statements were issued and that they no longer serve their intended purposes to provide encompassing guidance to the public on relevant healthcare competition issues.”

The withdrawal of these policy statements by the Antitrust Division further signifies a shifting landscape for antitrust enforcement in the healthcare sector, and potentially in other industries. The DOJ and FTC have applied the teachings of the policy statement concerning exchanges of competitively sensitive information in industries outside the healthcare sector. Industry participants will be subject to the vagaries of “case-by-case enforcement,” injecting a healthy dose of uncertainty into otherwise well-established enforcement principles. Each of these statements was co-issued by the FTC. While they remain in effect with that agency, it would not be surprising if the FTC in the near term follows the lead of the Antitrust Division and similarly withdraws them. Stay tuned.

 

Footnotes

[1] Dep’t of Justice & Fed. Trade Comm’n, Statements of Antitrust Enforcement Policy in Health Care (1996), at 8-9 (Statement 1).

[2] Id. at 13-14 (Statement 2).

[3] Id. at 41-42 (Statement 4) (exchange of non-fee-related information); 44-45 (Statement 5) (exchange of fee-related information).