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Publication
Merger law reform in Australia: What next after the Exposure Draft?
As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
Author:
Global | Publication | February 2023
The most recent news eliminates from antitrust enforcement several safe zones that have provided decades-long certainty in the industry
The environment surrounding information sharing and transactions in the healthcare sector has grown less certain as the two US antitrust agencies—the Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC)—continue to alter the enforcement landscape. In the most recent action on February 3, 2023, the DOJ withdrew its support for three policies that created longstanding safe harbors from antitrust enforcement on which the healthcare industry has relied for nearly thirty years. The healthcare industry immediately should take note of this and work to structure transactions and collaborate in new ways.
The three joint policies of the Antitrust Division and FTC from which DOJ now has withdrawn are:
With the announcement, the safety zones and the certainty they have provided to the healthcare industry no longer exist. The Antitrust Division's top official criticized them as "outdated" in light of intervening changes in the healthcare landscape and "overly permissive on certain subjects, such as information sharing." The Division encourages the healthcare industry instead to take guidance from its "Recent enforcement actions and competition advocacy," and moving forward notes that it will take a "case-by-case enforcement approach" to evaluate mergers and other conduct in healthcare markets.
Among the most notable recent enforcement actions are those that concern information exchanges, which DOJ's announcement singled out. The Antitrust Division recently has acted aggressively against these information exchanges—including those facilitated by third parties—in several industries, which can facilitate potentially criminal conduct like price- and wage-fixing.
The policy withdrawals are only the most recent indicator of the DOJ and FTC's intent to reshape antitrust enforcement in the healthcare sector. At an April 2022 "listening forum" on healthcare mergers, for instance, the FTC Chair said that "The types of potential consolidation and monopoly problems that we may be seeing in healthcare aren't just isolated to one corner of the industry … it's really across the board and systematic in a way that we really need to be vigilant across the board."
Revised merger guidelines are expected soon and further will alter the landscape for healthcare transactions.
Both the announced and anticipated changes arrive as healthcare providers seek to create efficiencies to meet their contractual obligations and to provide more effective care and meet quality goals while achieving cost savings, and as rural providers seek affiliations with centers of excellence to reduce duplication of services and ensure access to care. Squaring the two disparate needs has become more complex, with greater demands to think carefully at the outset as to how to explore new affiliations and joint agreements.
The healthcare industry should appreciate the significance of these changes and the likelihood of more changes to come. Industry members should act now to avoid becoming the subjects of government actions in this new enforcement environment.
Publication
As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
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