Claiming that “federal inaction” has caused a weakening of competition in many U.S. industries, on July 9 President Biden issued an Executive Order directing the Attorney General and the Chair of the Federal Trade Commission to “vigorously” enforce the antitrust laws. While the Order seeks to increase antitrust enforcement across a wide range of industries, President Biden singles out the healthcare industry for special attention and heightened enforcement. See Executive Order Fact Sheet.

As more fully explained in the Fact Sheet that accompanies the Executive Order, four issues in healthcare have resulted in a “lack of competition [that] increases prices and reduces access to quality care.” First, noting that Americans pay more than 2.5 times as much for the same prescription drugs as peer countries, the President attributes that circumstance, at least in part, to a “lack of competition among drug manufacturers.” The President specifically calls out so-called “pay for delay” settlements among drug companies for contributing to this dynamic, slowing the availability of generic drug alternatives and, consequently, increasing drug prices by over $3 billion each year. To tackle this issue, the President calls for, among other things, the importation of drugs from Canada, increased support for generic and biosimilar drug alternatives, and for the FTC to ban “pay for delay” agreements by administrative rule.

The President next takes aim at the hearing aid market, which impacts almost 50 million Americans with hearing loss. The Fact Sheet indicates that, on average, hearing aids cost more than $5,000 a pair, and that hearing aids are frequently not covered by health insurance. The Fact Sheet also claims that the high cost of hearing aids is the result of the four largest manufacturers controlling 84% of the market. To address this issue, the President calls upon the Department of Health & Human Services to issue a new administrative rule allowing for hearing aids to be sold over the counter (which, presumably, would lead a reduction in price).

Third, and perhaps most significantly, the Fact Sheet indicates that “hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable healthcare service.” This has occurred, at least in part (according to the President), because of “unchecked” hospital mergers. Stating that “research shows that hospitals in consolidated markets charge far higher prices than hospitals in markets without several competitors,” the President calls upon the Justice Department and the FTC to review and revise both the horizontal and vertical merger guidelines “to ensure patients are not harmed by such mergers.”

Fourth, the President also takes issue with the health insurance markets, stating that “consolidation in the health insurance industry has meant that many consumers have little choice when it comes to selecting insurers.” In addition, “even when there is some choice, comparison shopping is hard because plans offered on the exchanges are complicated – with different services covered or different deductibles.” To address this issue, the President calls for HHS to standardize plan options in the national health insurance marketplace so consumers can more easily “comparison shop.” The President also calls for greater support of the recently enacted “price transparency” rules that impact both hospitals and insurers.

Notably, while the President attributes a lack of competition in healthcare markets to “federal inaction,” federal antitrust enforcers have not only repeatedly claimed that healthcare markets are a principal area of focus for them, but have taken action as well. Just last year, the FTC brought antitrust challenges to three separate hospital mergers, and the FTC has brought numerous challenges to “pay for delay” agreements as well. At the DOJ, it was not long ago that several large health insurance mergers were successfully challenged in federal court (Anthem/Cigna, Aetna/Humana), requiring that they be scuttled. In addition, the Department of Justice and the FTC have also announced their intention to revisit the merger guidelines. Accordingly, whether the Executive Order will lead to any meaningful change in the way the healthcare industry, at least, is regulated by federal antitrust enforcers remains to be seen.