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FTC's Ramirez Says Health Care Providers Can Compete Under Health Law

By Jad Chamseddine, CQ Roll Call

April 8, 2016 -- Federal Trade Commission (FTC) Chairwoman Edith Ramirez disagrees with health care industry assertions that consolidation is the only way to stay competitive under the health care law.

Health care providers increasingly argue that "the only way they can accomplish the policy objectives" of the Affordable Care Act is to merge, Ramirez told reporters at an American Bar Association Antitrust event on Friday in Washington. "I don't think that's true," she said.

Ramirez argues the law encourages competition and expressed concern that more states are unnecessarily trying to shield mergers between hospital companies from antitrust suits from U.S. regulators. Several bills are circulating in state legislatures to stop federal officials from blocking health care company combinations.

Virginia and Tennessee want to let their state health departments decide whether hospital companies can consolidate assets or share information if the benefits from these arrangements would outweigh disadvantages. States would grant the businesses a certificate of public advantage.

Ramirez said these statutes, while based on good intentions, are unnecessary because the FTC works with local attorneys general to keep the health care industry competitive.

"The result of these state laws is that we will end up allowing arrangements to go forward that end up being harmful to competition," Ramirez said. She added that U.S. antitrust agencies make it "very clear" that they look favorably "upon pro-competitive collaborations among health care providers."

Her concerns are echoed by Victor J. Domen Jr., chairman of the Multistate Antitrust Task Force, a coalition of state attorneys general.  

"Most of the studies done show mergers of this type typically result in higher costs for consumers," Domen said at the event.

On the topic of rising prices for lifesaving drugs, Ramirez said her agency will take necessary steps to "root out anti-competitive consolidation or conduct" in the pharmaceutical industry that unfairly boosts prices.

Ramirez pointed to actions taken by the FTC this month in its charging of Endo International Plc with entering into anti-competitive agreements that delay the introduction of drugs and raise prices for consumers.

But Ramirez added not all price increases are necessarily antitrust matters, especially when the higher costs are related to manufacturing or supply problems, or if there is a shortage in a key ingredient of a drug.

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