Federal Trade Commission (FTC) Chairwoman Lina Khan is focused on avoiding monopolies in many industries, but healthcare is a priority on the agency’s target list.
“We all know that health care is not like buying a toaster. It really can be life or death for people, and that’s why it’s a particular area of focus for us,” Khan said at the Oliver Wyman Health Summit in Chicago on Monday. Is the area.”
Under Khan’s leadership the agency is focusing more on challenging M&A activity in health care and technology. Specifically, the agency had challenged pharma giant Amgen’s (AMGN) acquisition of biotech Horizon Therapeutics (HZNP). The deal has been approved and will close later this year. Similarly, the agency challenged the acquisition of Activision Blizzard (ATVI) by Microsoft (MSFT), but ultimately had to back down.
But Khan told the audience in Chicago that she is constantly learning from the industry consolidation that has occurred over the past several years.
He said, retrospective data from the FTC showed that “under the radar” deals – those worth less than $100 million – that are not required to be reported to the FTC may have contributed to market consolidation. The agency found that major tech companies, for example, closed several hundred such deals.
“We have, in some instances, just seen blind spots. Where we’ve seen a whole set of deals that are below our radar that are slowly and incrementally consolidating a market, and then over five years “In 10 years, you have two players, three players who have dominated,” Khan said.
That’s why in the proposed change, the FTC is now considering collecting more data on low-value deals. The FTC wants to gather information about past small deals in addition to other relevant M&A activity that can give the agency a better understanding of the acquiring company’s activity.
Taking stock of under-the-radar deals: Lena Khan (Saul Loeb/Pool via Reuters)
“It’s certainly a challenge. Congress is also considering it in terms of possible legislation,” Khan said.
He said that in health care specifically, consolidation of hospitals and provider groups has not shown any benefits in pricing and competition for patients.
“We think the consolidation we’ve seen across the board has had a very negative impact. We’ve seen prices rise without any improvement in quality or efficiency,” Khan said.
She wants to avoid the mistakes of the past, when the FTC took a more pragmatic approach to activity in the early 2000s, when it assumed the market would correct itself.
“After two decades, we’re realizing that not only was it wrong, but in some cases it was counterproductive. Because of these network effects and these economies of scale, markets can move much faster, and that’s actually The government needs to be more vigilant and make sure that at whatever levels you can imagine competition, we are really working vigorously to protect it, Khan said.
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