Health Law & Business News

House Judiciary Panel to Probe Competition in Health Care

Feb. 5, 2019, 5:39 PM

Scrutiny of competition in the health-care industry is on the agenda of the House Judiciary Antitrust Subcommittee, two sources familiar with the committee’s actions told Bloomberg Law.

“Competition in health care is definitely on the list of priorities for the committee,” Richard Luchette, communications director for panel’s chairman David Cicilline (D-R.I), said in an email.

Among the potential areas for scrutiny : the increasing consolidation of hospitals, the CVS-Aetna merger, and the Celgene/Bristol-Myers Squibb tie-up. The panel is joining the efforts of four other House committees in taking a closer look at health care, an issue that helped Democrats win control of the House in the midterm elections.

The CVS Health Corp. deal to buy Aetna Inc. is among the biggest health-care mergers of the past decade, combining the largest U.S. drugstore chain with the third-biggest health insurer. Bristol-Myers Squibb Co. agreed to acquire Celgene Corp. in a $74 billion deal that will unite two drugmakers battling for advantage in a crowded market for innovative cancer treatments.

Hospital and health system merger and acquisition activity has been increasing over the past 15 years, from 38 transactions in 2003 to 115 in 2017, according to an analysis by management consulting and software firm Kaufman Hall. It has been an area of concern for Centers for Medicare & Medicaid Services Administration Seema Verma.

The committee also could look at the relationships between pharmacy benefit managers—the middlemen who negotiate drug discounts and decide which drugs get preferred coverage in health-care plans—and pharmaceutical manufacturers and insurance plans, an area that has been of concern for the Trump administration.

The Trump administration just released proposed regulation that would no longer protect drug rebates paid by drugmakers to PBMs and insurance plans providing coverage through Medicare’s Part D drug program or Medicaid from federal anti-kickback laws.

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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