Federal Trade Commission (FTC) Chair Lina Khan has identified healthcare as a priority industry to prevent monopolies. Speaking at the Oliver Wyman Health Innovation Summit in Chicago, Khan emphasized the importance of healthcare and the potential life-or-death consequences it holds for individuals.
Under Khan’s leadership, the FTC has placed a greater focus on challenging mergers and acquisitions (M&A) in the healthcare and tech sectors. The agency recently challenged Amgen’s acquisition of biotech Horizon Therapeutics but eventually allowed the deal to proceed. Similarly, the FTC challenged Microsoft’s acquisition of Activision Blizzard, only to later withdraw their opposition.
Khan highlighted the importance of learning from past industry consolidation and protecting against market monopolies. The FTC’s retrospective data revealed that lesser-known deals valued below $100 million have contributed to market consolidation. Tech giants, in particular, have closed several hundred such deals, leading to a concentration of power among a few dominant players.
To address this issue, the FTC is proposing collecting more data on lower-value deals. This additional information would help the agency better understand the acquiring companies’ activities and make informed decisions. Congress is also considering potential legislation to address the challenges posed by under-the-radar deals.
In the healthcare industry, Khan emphasized that the consolidation of hospitals and provider groups has not resulted in any benefits in terms of pricing or competition. Increased prices without improvements in quality or efficiency have been observed, leading to concerns about the negative effects of consolidation.
Khan aims to avoid the mistakes of the past, where the FTC took a hands-off approach to market activity and assumed that self-correction would be sufficient. Recognizing the power of network effects and economies of scale, she emphasizes the need for government vigilance and protection of competition, particularly in sectors where it is feasible.
Sources: None
