The DOJ continued its transformation of long-standing antitrust policy on February 3rd, withdrawing a slate of long-standing antitrust policy statements addressing healthcare markets and providers. The three guidance documents, though non-binding, provided certainty in healthcare deal making for the past three decades.The first statement, issued September 1993, impacts antitrust safety zones for hospital mergers, hospital joint ventures involving high technology, and hospital survey information sharing, among others. The second statement, issued August 1996, included revised antitrust safety zones on physician network joint ventures and multi-provider networks and identified additional types of arrangements that qualify as a physician-network joint venture. The third statement, issued October 2011, focused on guidance provided after passage of the Affordable Care Act, and included guidance on Accountable Care Organizations, such as an antitrust safety zone for ACOs in the Shared Savings Program, and specific conduct to avoid for ACOs outside the safety zone.The agency provided several bases for the withdrawals and included that the statements are “overly permissive” in certain areas and have not kept up with changes in the healthcare industry over the last thirty years. The DOJ, also particularly skeptical of information sharing, cited overly permissive information-sharing as a basis as well. Ultimately, the Antitrust Division said, it prefers to withdraw the three statements in full, rather than reevaluate each on a piecemeal basis – an ambitious approach that is in line with the Biden Administration’s mandate initiated by the Executive Order on Promoting Competition in the American Economy, signed July 9, 2021. That Executive Order included 72 initiatives across federal agencies and focused on antitrust concerns.This withdrawal announcement will return the DOJ’s analysis of the health care markets to a largely case-by-case enforcement approach, which comes with reduced certainty for deal making and collaborations. The Antitrust Division maintained that the new case-by-case approach will improve the Agency’s ability to evaluate mergers and anticompetitive conduct in health care markets. Assistant Attorney General Jonathan Kanter: “Antitrust Division will continue to work to ensure that its enforcement efforts reflect modern market realities.” Modern realities of antitrust enforcement mean that collaborators in the health care space should move forward with greater care.The announcement claims that recent enforcement actions and advocacy provide sufficient guidance of how the agency is likely to proceed – if not the reception such moves will get in court. The FTC likewise has been a partner in the Division’s move to highly scrutinize the health care markets. In 2022, the Antitrust Division’s unsuccessful challenge of the UnitedHealth-Change Healthcare transactions made headlines, to that agency’s dismay; while the FTC’s apparent comfort with advancing potentially unsuccessful claims led to its unsuccessful challenge of the Illumina-Grail transaction. The UnitedHealth-Change Healthcare challenge centered on access to competitively sensitive data in Change’s business, which the federal district court rejected based on UnitedHealth’s past practice and a proposed divestiture plan. Meanwhile, the Illumina-Grail challenge focused on Illumina’s post-acquisition ability to advantage Grail over alleged rivals, in the relevant market of MCED tests, which the FTC’s Chief Administrative Law Judge rejected, based on Illumina’s already existing ability to raise prices before the acquisition, and Illumina’s long-term supply agreement offer to rivals. Given that the three longstanding statements were jointly issued by the DOJ and the FTC, we expect the FTC to follow suit and similarly withdraw the statements.

Federal antitrust regulators’ removal of antitrust safety zones in the health care markets is significant not only as yet another example of reversing long-standing jurisprudence, but also because of the significant ambiguity under which health systems must now operate. The guidance, while non-binding, ultimately served as strong protection against overbroad enforcement. With landscape changes coming in fast succession, deal makers in the healthcare space would do well to stay current on recent enforcement actions and adjust accordingly.
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Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Colin Kass Colin Kass

Colin Kass is a partner in the Litigation Department and co-chair of the Antitrust Group, and a member of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team. An experienced antitrust and commercial litigation lawyer, Colin has litigated cases before federal and state courts throughout…

Colin Kass is a partner in the Litigation Department and co-chair of the Antitrust Group, and a member of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team. An experienced antitrust and commercial litigation lawyer, Colin has litigated cases before federal and state courts throughout the United States and before administrative agencies. His practice involves a wide range of industries and spans the full-range of antitrust and unfair competition-related litigation, including class actions, competitor suits, dealer/distributor termination suits, price discrimination cases, criminal price-fixing investigations, and merger injunctions.

Colin also has extensive experience dealing with the Federal Trade Commission and Department of Justice in obtaining clearance for competitively-sensitive transactions and handling anticompetitive practices investigations. His practice also includes counseling clients on their sales, distribution, and marketing practices, strategic ventures, and general antitrust compliance.

Photo of Bryan A. Cruz Bryan A. Cruz

Bryan A. Cruz is an associate in the Litigation Department.

Bryan earned his J.D. from Harvard Law School, where he participated in the Crimmigration Clinic and as an extern at the Asian American Legal Defense and Education Fund through the Voting Rights Litigation…

Bryan A. Cruz is an associate in the Litigation Department.

Bryan earned his J.D. from Harvard Law School, where he participated in the Crimmigration Clinic and as an extern at the Asian American Legal Defense and Education Fund through the Voting Rights Litigation and Advocacy Clinic. Bryan interned his 1L summer at Disability Rights Texas.

Prior to law school, Bryan taught bilingual elementary school in San Antonio, Texas for two years as part of Teach For America. Bryan then taught middle school for two years.