FTC Forms Healthcare Task Force, Citing Device Merger Challenges

Federal Trade Commission Chairman Andrew N. Ferguson has directed agency staff to form a Healthcare Task Force to coordinate the FTC's competition and consumer protection work across the health care industry, the agency announced on March 20. In the directive, Ferguson pointed to two medical device deals the agency challenged in the past year as examples of its work.

In a memorandum dated March 20, Ferguson directed the Bureaus of Competition, Consumer Protection and Economics, the Office of Policy Planning and the Office of Technology to form the group. Through the task force, the memo says, the agency's teams will share knowledge, resources, third-party sources, market intelligence, case leads and relationships with other agencies and stakeholders.

What the task force will do

According to the FTC, the task force will lead targeted enforcement and advocacy initiatives on key priorities, devise coordinated agencywide strategies on investigations, take a proactive approach to identifying amicus and statement of interest opportunities, and identify emerging issues and new priority areas for enforcement and advocacy.

The memo says the group will be co-chaired by one representative each from the Bureaus of Competition and Consumer Protection. It will include at least three members from each Commission bureau and one member each from the Office of Policy Planning, the Office of Technology and the Office of General Counsel. The full task force will meet at least once a month and report to the chairman quarterly.

The FTC said the task force will also seek to add other agencies and law enforcement partners, including the Department of Health and Human Services and the Department of Justice.

Device deals among the cited cases

The memo lists several actions from the past year. Among them, it says the FTC "successfully challenged Edwards' proposed acquisition of JenaValve," preserving competition in the US market for transcatheter aortic valve replacement devices that treat aortic regurgitation. It also says the agency "stopped the proposed merger of Alcon and Lensar," which it described as the two most significant players in laser systems used in femtosecond laser-assisted cataract surgery, and that the companies abandoned the deal after staff identified substantial competitive concerns.

Other examples in the memo include a settlement with pharmacy benefit manager Express Scripts, which the FTC said is expected to cut patients' out-of-pocket costs for drugs such as insulin by up to $7 billion over 10 years, an agency estimate, and renewed challenges to dozens of device patents the agency says were improperly listed in the FDA's Orange Book, shielding brand-name epinephrine autoinjectors and asthma, diabetes and COPD drugs from generic competition.

Why the FTC says health care is a priority

Ferguson tied the move to a presidential executive order calling for a "more competitive, innovative, affordable, and higher quality healthcare system." In the memo, he wrote that the industry constitutes "an extraordinary eighteen percent of our country's GDP, yet too many Americans struggle to get the care they need at prices they can afford."

"Consolidation and anticompetitive conduct have distorted the economic landscape in many healthcare markets," Ferguson wrote. "The results are disturbing: higher prices, decreased quality, less access and transparency, and stifled innovation."

The announcement did not name the task force's co-chairs or say when it would issue its first quarterly report.