The Federal Trade Commission (FTC) under Chair Lina Khan took an aggressive approach to tackling anticompetitive behavior in the healthcare space. MedPage Today asked policy experts and physicians whether a Trump administration would continue down that same path.
“With respect to competition, it has actually been really heartening to see the administration focus on the impacts of anticompetitive actions on real people,” said Andrea Ducas, MPH, vice president of health policy at the left-leaning Center for American Progress in Washington, D.C., citing the agency’s work on alleged gaming of the drug patent system, which drives up prices for consumers, as one example.
Given Trump’s business background, it’s hard to imagine the agency adopting a similar “activist” approach, she noted. That being said, if Trump takes the posture that he’s “standing up for the little guy,” and wants to ensure people aren’t cheated by corporations, he should “want to continue with the standard that Lina Khan has set,” Ducas argued.
Probe of Private Equity, Mergers
Private equity in healthcare has recently come under fire, and the FTC and partner agencies have stepped up to address the issue.
In March, the FTC, Department of Justice, and HHS launched a joint investigation into the role of private equity and “corporate profiteering” in healthcare to better understand the impact that acquisitions have on hospitals and healthcare facilities, and to identify the right enforcement tools to combat the problem.
David Balto, an antitrust lawyer based in Washington, D.C. and a former policy director for the FTC, argued that under Trump, “Republican antitrust enforcement would be more cautious … more conservative about the scope of the law” and unlikely to pursue action.
However, David Schwartz, a partner at global law firm Bryan Cave Leighton Paisner and a former FTC lead investigative attorney, said that Republicans and Democrats alike are concerned about healthcare acquisitions by “far-off owners,” for whom patient care is seemingly not prioritized.
Schwartz noted that comments have closed on the agencies’ joint request for information, and no further action has been taken. He said that he will be watching to see whether the agency makes a move or lets the investigation “expire quietly” as a signal of what direction Trump’s FTC will take.
As for the finalized pre-merger guidelines announced in October, which the FTC said will help “determine which deals require an in-depth antitrust investigation,” Daniel Gilman, PhD, of the International Center for Law & Economics and a former attorney advisor in the FTC’s Office of Policy Planning, said that they are likely to be revised, withdrawn, or replaced, since “they blur distinctions between types of mergers,” and “attempt to stretch the law considerably.”
PBMs Still Under Fire?
In September, the FTC sued the leading pharmacy benefit managers (PBMs), the middlemen between drug companies and insurers, for allegedly driving up insulin prices.
Balto credited the Trump administration with recognizing that PBM rebate schemes were leading to higher drug prices, which changed the way federal enforcers saw these players. “Republicans have been much tougher on PBMs than Democrats were,” he said.
In 2019, HHS proposed scrapping the “safe harbors” that critics say incentivized PBMs to drive drug prices up and instead required discounts to flow directly to patients. Ultimately, that change wasn’t enacted, but it led to other actions, including the agency’s current PBM lawsuit, Balto said.
“So, besides the 70 million people who voted for Kamala Harris, the other people who didn’t sleep well [election] night were the PBMs,” he noted.
Asked whether the current lawsuit might continue, Schwartz said he expects the next FTC to “let it play out.” Because there’s a wall between staff prosecuting the case and agency commissioners (who will serve as judges following any initial appeal), they cannot direct FTC staff to drop the case, he explained.
Gilman said that he anticipates that there will be problems if the case reaches federal court, but he also does not expect a new administration to “keep pushing this if it runs into trouble.”
Orange Book Scrutiny
The FTC under Khan had also zeroed in on alleged abuses of the FDA’s Orange Book.
By listing a patent in the Orange Book, drug and device manufacturers essentially shut out competitors, often by leveraging patents that should never have been eligible for the book in the first place, Khan explained in an interview with MedPage Today’s Editor-in-Chief Jeremy Faust, MD, including patents for components of devices that have nothing to do with the drug’s underlying ingredients.
In response to letters challenging the patent listings, “whole sets of companies dropped their listings,” Khan said.
Balto said he expects the FTC under a Republican administration to continue to support actions to mitigate Orange Book abuses. “That’s something that a Republican antitrust enforcer would see as really pernicious,” he said.
However, Schwartz said there are “good arguments” for and against the listings. On one hand, listing all of a drug’s patents creates hurdles for generic manufacturers. On the other, it prevents “surprise patents” from popping up down the line.
He added that he anticipates a Trump administration would either completely drop the issue or “take a middle ground,” such as by conducting additional market-based research of Orange Book listings to gauge their competitive effects.
A Controversial Rule
In April, the FTC issued a final rule banning most noncompete agreements in employer contracts, which “will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market,” said Khan at the time.
However, in August, a federal court struck down the ban, and the agency filed an appeal in mid-October.
Gilman said he expects the noncompete ban to “fold,” adding that it’s uncertain whether the FTC has competition rule-making authority to address the matter.
Even if the ban were revived, the agency lacks the staff or experience to enforce a labor rule this broad, he said, making it hard to picture the new administration fighting to save it.
Schwartz suggested that the future of the noncompete ban will depend in part on the composition of the commission.
Will Khan Stay or Go?
Asked whether Khan might stick around during Trump’s tenure, Mitchell Li, MD, an emergency medicine physician and founder of Take Medicine Back, said “it’s still very up in the air.”
Li noted that while Vice President-elect Vance has been cast as “a Wall Street guy,” he has a track record of skepticism around private equity and voiced explicit support for Khan, describing her “as one of the few people in the Biden administration that I think is doing a pretty good job.”
The question is who Trump will listen to for agency head recommendations, Li said. “He has influences going in both directions, with [Elon] Musk being the most apparent that would not likely be supportive of the FTC’s current agenda, and RFK [Robert F. Kennedy Jr.] and Vance, who might be supportive.” (In a post on X, Musk wrote that Khan “will be fired soon.”)
Balto said that Khan “is not going to stay around that long … She’s revitalized enforcement of the FTC in a truly revolutionary fashion,” but after the inauguration, Trump will name Republican members as chairs to regulatory commissions, including the FTC.
Schwartz said he also sees Khan’s chances for remaining chair as “exceedingly low,” despite the overlap between her goals and Vance’s, adding that commissioners Melissa Holyoak or Andrew Ferguson, both Republicans, could become acting chair.
“The most important number for the FTC under any administration is three,” he noted. “That is, Trump needs to have three Republican commissioners on the FTC to have a majority to carry out his priorities. To get to three, Trump would have to fill an open seat on the commission. The only open seat is Chair Khan’s, as her formal term expired on Sept. 26.”
Traditionally, chairs have resigned with a change in party, he said, but there’s no requirement to do so. Khan can remain acting chair until a replacement is confirmed.
Shannon Firth has been reporting on health policy as MedPage Today’s Washington correspondent since 2014. She is also a member of the site’s Enterprise & Investigative Reporting team. Follow
Source : MedPageToday