Joe Miller and Bruce Sokler, Co-Chairs of Mintz Levin’s Antitrust Practice, discuss President Biden’s July 9 executive order, which called for a government-wide focus on antitrust competition issues and identified 72 initiatives across several industries. They provide an overview of the aspects of the executive order that are of particular importance to the health care industry, including wage and labor issues, hospital mergers, and pharmaceutical issues. From AHLA’s Antitrust Practice Group.
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This episode of A H L A speaking of health law is brought to you by a H L A members and donors like you. For more information, visit american health law.org.Speaker 2:
Hey everyone. I'm Joe Miller. I'm vice chair of a h l a's Antitrust Practice Group. I'm also co-chair of Mince Levin's Antitrust Practice , uh, where I focus in the healthcare industry. I'm here today with my partner Bruce Soler . Uh, Bruce, will you want to introduce yourself , uh, for a minute, and then we'll join with the conversation?Speaker 3:
Hi everyone. Uh, as Joe says, I'm Bruce Soaker . I'm the other co-chair of Mince Antitrust Practice, and I've been , uh, doing healthcare antitrust for several decades. I'm afraid to say, you know, Joe. Um, it's a rare event when antitrust leads the news and the New York Times, and that seems to be happening more and more frequently. Uh, you know, very recently it happened in connection with the , uh, executive order , uh, president Biden put out on , uh, July 9th, which called for an across the government focus on antitrust competition issues, and identified , uh, 72 initiatives , um, across several industries. Um , what do you think is of particular importance to the healthcare industry in there?Speaker 2:
So, if there's a lot , uh, that's of importance to the healthcare industries, you said it cuts across industries and it's got , um, a particular focus on a few industries. Healthcare is one of them. Of course, the FTC and the Justice Department has been focused on healthcare for a long time. Um, but I think here they're particularly looking at hospital mergers. They're encouraging , uh, the FTC to go back , uh, and examine what they've been doing and to, you know, particularly focused resources there on pharmaceutical issues and pharmaceutical distribution and PBM issues. So those are, those are, you know, three of the most important topic areas and industries that the , um, administration thinks they'd like to focus on.Speaker 3:
Yeah, and one other thing I noticed that's probably particularly relevant to the healthcare industry, even though it was expressed as a more general set of initiatives, is it's sort of in the labor wage , uh, area. Uh, the executive order has this recommendation that the FTC consider , uh, banning unreasonable , uh, non-compete provisions and employment agreements, et cetera . And we know that there's been litigation over, you know, non-competes and no poach agreements in lots of industries, including , uh, the healthcare industry. Moreover, they, they , the executive lawyer puts some focus on , uh, wage and salary and other surveys that are done by employers and, you know , calls on the , the Justice Department of the FTC to take a harder look at guidance they already have in place against that, and also suggests that , um, some of this stuff should be , uh, also , uh, transparent to employees, to workers, which is, I think , consistent to, you know, with the Biden's administration's , uh, pro-labor approach than a lot of things. And, you know , uh, while it's like in a different section of the EO than healthcare , it's one that people ought to pay attention to.Speaker 2:
Absolutely. So there was , um, in the previous administration focus on labor issues , uh, of sort, I think there's a more aggressive posture here. So over the last year or so, you saw some state ags going after , um, non , uh, non-compete provisions , uh, in low wage industries , uh, where I think it's, you know, from an antitrust perspective , um, easiest as a plaintiff to focus here. I think there's a broader focus on non-compete agreements. Um, the no poach , um, no poach agreements being I agree not to poach your workers, you agree not to poach mine. Um, that in 2016 was a huge focus of the administration and announced, and it's actually saw on Dojo's website that that would be criminally prosecuted. So , um, you know, if they caught you from here on out, that would be , um, that would be , um, the focus of a grand jury investigation. And those, those have actually happened. So I think you see, you know, even more of a focus, but this has not been ignored. Um, I think it's important for healthcare because traditionally , um, or not traditionally, but some of these cases that you have seen in the past have focused on healthcare . So there was a , uh, nurse , uh, nurse wage case , um, and , um, class actions , um, probably 15, 20 years ago. Um, uh, another one from the Justice Department , um, in the mid two thousands for traveling nurses , um, where there was agreements among hospitals to suppress their wages. Uh , those were civil cases, and I think you need to bear down a lot on that. Now. I think that's, you know, common for hospitals to have wage surveys for , um, all sorts of employees to share that information. That's something that everybody should pay attention to. And of course, you know, on the no poach front , um, there was a famous case in North Carolina involving Duke University that, you know, entered into , uh, a no poach agreement with a rival hospital that, you know, got them into some trouble. And there's more litigation, you know, over that. Um, so I duke think that's , uh, a , you know, it has been a focus, it'll be an increasing focus. I thought it was interesting in the executive order, encouraging , um, uh, justice Department to go back and review their 2016 policy, which had been a more aggressive stance than had, than you'd seen in the past.Speaker 3:
Uh , your reference to the word encouraging or encouraged is , uh, particularly appropriate because the executive order for the most part is not self-executing. And in fact, the , the president really doesn't have a authority to , uh, implement many of the things, particularly things that would have to be done by , uh, independent agencies like the Federal Trade Commission , federal Communications, and others. Uh , it, it didn't take long, however, for the , uh, chair of the FTC and the , uh, interim head of the Department of Justice to put out a statement the same day last, last week, to the effect that , uh, we hear you and we're gonna start a review of the merger guidelines, this , this , uh, toughen them up. Uh ,Speaker 2:
So on, on that in particular, I'm sorry to interrupt, but I think that's an important point to bring out. Um, so the merger guidelines, of course, cut across every industry. Uh, and this kind of got buried in the news of the executive order because it inf so much. Uh, so if FTC and DOJ do nothing else besides toss the current merger guidelines and do something much more expansive, that's gonna be a huge deal. Uh, it will take them a while , I think, to write it. Um , but there's a big gap between case law and the , um, and what the agencies actually do. Um, that is the case law is more permissive than the agencies , um, you know , uh, uh, than the agencies bring their cases. They can bring them , um, the site cases , um, that, you know, go back several decades that are no longer sort of , uh, forward-looking antitrust analysis , um, because they're actual precedent, and that's what a district court has to follow. Uh , but the analysis , uh, that they do internally and to decide to , you know, what cases to bring is more along the lines of the merger guidelines. Uh, and so this is, this is a pretty big dealSpeaker 3:
And, you know, it should be looked at alongside of, I think , uh, other activities that are happening , uh, in the , uh, antitrust area, both on Capitol Hill, where people probably know that there's a dozen or so bills kicking around. Whether any of them will get through , uh, this Congress or not is a different question, but it , they range from process to giving more money to the agencies to changing the substantive standards, but particularly again, for the healthcare industry. Uh, the new chair appointed by Biden of the ftc, Lena Kahn , has hit the ground running. And she had her first open meeting, and she took, you know, several steps. One was to , uh, withdraw a policy statement that made it clear that the FTC Act, section five prohibition of unfair method competition was going to be safely grounded in , uh, the Sherman Act and in the notion of consumer welfare and basically opening it up for a broader application, at least at the , uh, commission level. Moreover , uh, the commission by a three to two party line vote authorized 10 years worth of investigations , uh, potentially in seven focus areas, one of which, of course , um, is , uh, hospitals and other, and we, and previously, even before she arrived, the commission announced some retrospective looks at provider mergers among physicians and non hospitals. So there's a lot going on. And, you know, before we were out of time, you know, we wanna go back to the eo , I think, and Joe , you, it'd be helpful if you , um, mentioned some of the recommendations or encouragement that was done in the pharma and pay for delay area,Speaker 2:
So that, that's another important area. And this is also news. So , um, among the encouragements was , uh, for the FTC to use its rulemaking authority , uh, to tackle some of the , uh, sticky pharma issues, you know, pay for delay, reverse payment in particular. And so this has been something the FTC has been, you know, pursuing for decades. Uh, it finally got a case to the Supreme Court, the activist case. Um, you know, they won that at the Supreme Court. They, you know, found a standard to apply, and now they've applied it. Uh, and then there's, you know, recent , uh, as of a couple of months ago, court of appeals decision , um, uh, out of the fifth Circuit , uh, applying the rule of reason. And so that has, you know, taken a , you know , a long time to work its way through. Um, and I think, you know, one of the reasons is that it's an enormously complex set of issues that comes out of, you know, how to settle , uh, intellectual property disputes , um, when there's market power involved , um, as there are, as there is frequently with , uh, with pharmaceutical products. Um, here the encouragement is to write , um, more general rules , uh, using the rulemaking authority. Uh , the reason that this is novel is that it's never been done as far as I know, for competition issues, only for consumer protection issues. Uh, and so taking a more , uh, broad rule-based approach as opposed to a case by case approach , uh, will be , um, you know, new for all of us , uh, you know, question whether the FTC has the authority to do that. I'm sure that'll be challenged , uh, if in fact they, they go forward with that. So a a little more news outta the eo , um, on thatSpeaker 3:
Front. Right. Here's my final observation, and then Joe, you can back clean up . Um , the executive order also , uh, established a council within the White House to coordinate all of these activity, and they keep track of the 72 initiatives. You know, it's, it's unclear sitting here in July of 2021 . At the end of the day, how much is really gonna change? However, there's going to be a lot of pulling and tugging here on these issues throughout the government. And I think what the executive order and these , and these early initiatives that the FTC make clear is that they mean it, they're gonna try and they're gonna , and they're gonna , and things are gonna happen, and it's gonna lead to uncertainty and potential change. And people are well advised to keep close and not just view it as more noise, you know , coming out of our nation's capital .Speaker 2:
Right. No , I completely agree with that. Uh, a lot of it, well, some of it will be noise. Some of it's gonna be relatively easy to do, some of it's harder to do. So , uh, I think there's, you know , um, bipartisan consensus on some of the recommendations. Um, uh, for instance, lowering , lowering barriers to entry for, you know, some jobs. Um , para braiding has been a common one. Um, uh, there's been a bunch of cases against dental boards , uh, to try to get, you know, non-licensed dentists to be able to, you know, do some dental services, things like that. I think that's, you know, relatively popular across the board, except if you happen to be a dentist and don't want the competition , um, other things will be, will be much harder. But I do agree that, you know , um, Lena Khan in particular , uh, seems quite energetic , uh, and seems , uh, to take a different approach to her job at the ftc, which is traditionally been a consensus , uh, a place that's, you know, run through consensus. Um, uh, when Tim URIs came in , um, as , um, uh, George Bush's FTC chair , um, you know, he had a goal to have unanimous votes all the time. Um, and, you know, traditionally being a Republican or being a Democrat as a commissioner didn't really matter that much except for , um, you can only have, you can't have more than three of one party. Uh, here this seems much different. It seems that she's, you know, willing to come in and do things on a straight party line vote , uh, and is is quite , uh, quite eager to do so. So I think that's another, that's another , um, cultural shift.Speaker 3:
So we've only scratched the surface, but hopefully anyone who listens or watches this will find it helpful and maybe wet their appetite to, to dig deeper and keep track of this stuff as it evolves.Speaker 2:
Uh, thanks Bruce. Uh, and thanks to the A H L A for hosting us. For those who are interested, the A H L A will host a 90 minute webinar at the end of August , uh, maybe August 18th, 19th of the dates we're looking at to dive deeper into these issues. Um, we'll get some different perspectives, different voices, and we hope you'll join us there. Thanks.Speaker 1:
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