New merger guidelines and HSR (Hart-Scott-Rodino) rules signal intensifying antitrust scrutiny in the healthcare sector, reflecting a significant shift that could complicate and prolong the merger review process, according to a recent article.
"The bottom line for those in the healthcare industry considering growth and expansion strategies is that the proposed HSR Rules and the agencies’ more complex and expansive Merger Guidelines will increase deal timelines, the merging parties’ burden and overall uncertainty and potential antitrust risk as to the outcome," the article's authors Wendy Arends, Mark Tobey and Kelsey Toledo said.
Released on July 19, the draft merger guidelines indicate a significant shift from the 2010 Horizontal and Vertical Merger Guidelines. The proposed HSR rules, unveiled on June 27, mark the first significant update in more than four decades. These changes could complicate and prolong the merger review process across industries, including health care.
The article emphasizes the significance of public feedback on the Merger Guidelines, which are open for submission until Sept. 18. The Federal Trade Commission (FTC) has also extended the comment period for the Proposed HSR Rules until Sept. 27.
The authors note, "If implemented in their current form, both will have the effect of making the merger review process lengthier, more complicated and more burdensome for virtually all companies, including those operating in the healthcare industry."
They further state that healthcare-related Statements of Antitrust Enforcement Policy are being rescinded by both the FTC and the Department of Justice (DOJ). This change leaves the health care industry without clear guidelines on joint purchasing, collaborations and sharing price and cost information.
The article outlines several key aspects of the draft merger guidelines, which focus on market concentration, cluster markets, vertical transactions, labor market scrutiny and private equity rollups.
The authors summarize, "The bottom line for those in the healthcare industry considering growth and expansion strategies is that the Proposed HSR Rules and the Agencies’ more complex and expansive Merger Guidelines will increase deal timelines, the merging parties’ burden and overall uncertainty and potential antitrust risk as to the outcome."
These newly proposed guidelines and rules signify a significant shift in the landscape of antitrust enforcement, with potentially profound implications for the healthcare industry. Companies operating in this sector should take heed of the upcoming changes and consider the broader implications for their future growth and collaboration strategies.
