Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Commissioner McSweeny reflects on public, private enforcement efforts, (Dec 4, 2014)

By Greg Hammond, J.D.

FTC Commissioner Terrell McSweeny presented the keynote address on December 2 at the American Antitrust Institute’s 8^th Annual Private Enforcement Conference and Awards Dinner at the National Press Club in Washington, D.C. In her prepared remarks, she discussed the Clayton Act’s centennial and how “Congress’s vision of public and private enforcement working together to deter anticompetitive conduct and to protect consumers is alive and well today.”

In her first example, Commissioner McSweeny discussed FTC v. St. Luke’s Health Sys., Ltd.(2014-1 Trade Cases ¶78,667), in which the largest primary care physician practice in Nampa, Idaho was purchased by the second largest practice, resulting in an entity with 80 percent of the primary care physicians in the market. After a private enforcement action was filed, the FTC and the State of Idaho also sued to block the deal, due to likely harm to consumers—higher prices and lower quality of care. The federal district court in Boise agreed with the plaintiffs, finding that the transaction violated Section 7 of the Clayton Act and the Idaho Competition Act.

“As today’s conference discussed in detail, I recognize that private plaintiffs are facing increasingly tightened pleading standards, changes to class certification, and other limitations imposed by courts,” McSweeny said. “These changes pose new challenges to private plaintiffs, but the St. Luke’s case demonstrates how private plaintiffs, the FTC, and states can work together to challenge an anticompetitive transaction and protect consumers.”

The Commissioner also noted the U.S. Supreme Court’s review of FTC v. Actavis (133 S. Ct. 2223, 2013-1 Trade Cases ¶78,419), in which the Court confirmed that reverse payment agreements in the pharmaceutical industry harm competition. Acknowledging that the decision left the structure of the rule-of-reason analysis to the lower courts to decide, McSweeny stated, “Going forward, the FTC, state enforcers, and private plaintiffs will all help lower courts interpret what Actavis means for litigants.”

Since Actavis, the Commission filed an amicus brief in the Third Circuit U.S. Court of Appeals, on the issue of whether the Supreme Court’s opinion is limited strictly to cash, as opposed to in-kind compensation. The FTC argued that the in-kind payment at issue in King Drug Co. of Florence, Inc. v. SmithKlineBeecham Corp. (ED Pa., Case No. 14-1243)—“a ‘no authorized generic’ commitment whereby a brand refrains from marketing its own authorized generic in return for delayed generic entry—is a type of reverse payment subject to scrutiny under the Supreme Court’s analysis in Actavis.”

“These are just a few examples of the Commission and private plaintiffs working alongside each other to shape the contours of antitrust law,” McSweeny said. “Going forward, I expect there to be more—not only in the health care space, but perhaps also in sectors where our understanding is evolving, such as the role patent assertion entities are playing in markets.”

News: Antitrust FederalTradeCommissionNews