Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Revived Antitrust Legislation Would Shield Pharmacies, Subject PACs to Liability, (Mar 21, 2013)

By Jeffrey May, J.D.

Two pieces of legislation that were recently introduced in the U.S. House of Representatives revive proposals to create an antitrust exemption for independent pharmacies and to make the antitrust laws applicable to political action committees.

On March 15, Rep. Tom Marino (R-PA) announced the re-introduction of legislation “that would level the playing field for independent, community pharmacies across the country.” The proposed “Preserving Our Hometown Independent Pharmacies Act of 2013” (H.R. 1188) “would provide a limited exemption for community pharmacies from antitrust laws that currently prohibit them from banding together to negotiate better contract terms from the large companies that dominate the prescription drug benefit marketplace,” according to the bill's sponsor. “This bill would give independent pharmacies more leverage when they are negotiating with insurance companies and pharmacy benefit managers.”

Marino introduced the Preserving Our Hometown Independent Pharmacies Act in 2011, and the House Judiciary’s Committee’s Subcommittee on Intellectual Property, Competition, and the Internet held a hearing on the legislation. At that hearing, FTC Bureau of Competition Director Richard Feinstein expressed the agency’s opposition to the proposal.

“Although the Commission is sympathetic to the difficulties community pharmacies face, the proposed exemption threatens to raise prices to consumers for much-needed medicine, which would have an especially dire impact on seniors,” Feinstein said in the prepared testimony. “It also threatens to increase costs to employers who provide health care insurance to employees and retirees, which may cause those employers to reduce or eliminate benefits. And there is no assurance that the proposed exemption would produce any offsetting higher quality care.”

The current measure is co-sponsored by Rep. Judy Chu (D-CA). Chu supports the exemption for independent pharmacies while at the same time being on the record as having objected to the limited antitrust exemption for health insurance companies.

Chu's first vote on the House Judiciary Committee in October 2009 was to repeal the McCarran-Ferguson Act exemption for health insurers. The bill (H.R. 3596), the proposed “Health Insurance Industry Antitrust Enforcement Act,” never became law. At that time, Chu said she was “shocked” to learn of the exemption and called for “a fair playing field” in order to “implement true healthcare reform.”

“This bill is an all-around win for the American people,” said Chu of the current proposed pharmacy exemption. “The ability to negotiate for drug reimbursements will keep hometown pharmacies competitive against their larger counterparts by driving down costs. This is crucial to making sure corporate interests don’t achieve market dominance over prescription drugs, and will safeguard countless jobs in our communities that would otherwise be lost due to competitive disadvantage.”

The proposed Preserving Our Hometown Independent Pharmacies Act of 2013 has the support of the National Community Pharmacists Association. “H.R. 1188 makes the contracting process more even-handed by allowing independent community pharmacies to join together to negotiate reasonable contracting terms similar to when large publicly traded chain pharmacies like Walgreens with its 7,000 stores are able to negotiate,” said the trade group's CEO, B. Douglas Hoey, RPh, MBA, in a March 15 statement.

Political Action Committees

Separately, Rep. Alan Grayson (D-FL) reintroduced legislation that would subject political action committees to the antitrust laws. The proposal (H.R. 1113) was introduced on March 13. Grayson first introduced the proposal after the U.S. Supreme Court’s 5-to-4 decision in Citizens United vs. Federal Election Commission. Intended to be a tool in a campaign finance reform effort, the proposed “Ending Corporate Collusion Act” (H.R. 4433) was introduced in the 111th Congress in January 2010. According to Grayson, this bill, among others, would help to “prevent a corporate takeover of government in America” and to “stave off the threat of ‘corpocracy.’” The bill never made it out of the House Judiciary Committee's Subcommittee on Courts and Competition Policy.

News: Antitrust