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AHLA's Speaking of Health Law
2025's Biggest Health Care Antitrust Developments and What to Expect in 2026
In the eighth installment of their popular annual series, John D. Carroll, Partner, King & Spalding LLP, and Alexis J. Gilman, Partner, Alston & Bird LLP, discuss 2025's biggest antitrust developments and what attorneys should expect in 2026.
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SPEAKER_02:Hello, welcome everybody to our eighth consecutive installment of the top 10 healthcare antitrust developments in 2025, and the top 10 healthcare antitrust developments or uh likely developments that we are looking forward to in 2026. I'm your co-host, John Carroll, uh, here in Washington, D.C. And I'm a partner at King and Spaulding, where I recently returned just a few weeks ago. And I have the pleasure of being joined by my friend Alexis Gilman, uh, who is also in Washington, D.C., and a partner at Alston and Byrd, where he also recently uh joined. Not rejoined, but recently joined uh just a few months ago. So we were not so self-indulgent and self-centered as to include those as the top 10 developments in 2025. Uh we'll leave it up to you to conclude whether that would be the case. And as per usual, uh, for those of you who are returning listeners, we're gonna go through 10 through 1, 2025, and then 2026. Um, on behalf of uh both of us, it's a pleasure to be doing this for the American Health Lawyers Association. Uh definitely subscribe to their content where available. Um, I will also point out, other than generally pointing out that it's been an extraordinarily active year, that neither Alexis nor I will be giving any editorial comment on any of these developments. Um, this is a just the facts podcast highlighting uh the most important developments. And again, at least in our, we'd like to think somewhat objective view, what we think will likely be very important developments in the year to come. So with that, I'm happy to turn it over to you, Alexis, to kick us off at number 10.
SPEAKER_00:Yeah, thanks, John. Great to be doing uh this with you yet again. Uh, we have a lot to talk about and cover. And as you said, um, this will reflect our best objective assessment of top developments, but doesn't necessarily reflect our views or those of clients or the firm. Um, but let me kick it off with number 10, missing, of course, at just at 11, would it would have been our moves to new firms. But but number 10 is just really Trump 2.0 and the effect that's had on healthcare antitrust enforcement. Um I think you see that in a couple places. One is with respect to personnel. There's a new chair at the FTC, Andrew Ferguson, who was tapped by the president to leave the FTC. He's a former Solicitor General of the Commonwealth of Virginia. Uh Mark Meador was um nominated, confirmed as another Republican commissioner at the FTC. He's a former FTC DOJ and Senate staffer, and he worked in private practice for a while. Uh, he joined in April, and commissioner, uh Republican Commissioner Holyoke, made up the third Republican for a time, but she's now departed to become the U.S. Attorney in Utah. Um, another major development was that the president uh removed both Democrats from the FTC, Rebecca Slaughter and Alvaro Badoya. Um former Commissioner Slaughter is uh litigating uh a case to be restored to her seat on the commission. And then over at the DOJ, Gail Slater uh was confirmed, easily confirmed, really, as the head of the DOJ's antitrust division. And we've seen just a whole lot of policy developments. We don't have time to go through them all one by one, and we'll mention a couple of them in other parts of our top 10 for the year, but I'll just point out a couple, which is this administration repealed uh the Biden administration's executive order on competition, which called for a whole of government approach to competition enforcement and also called out consolidation as healthcare as one area of concern. Uh the FTC and DOJ, perhaps surprisingly, um, have retained the 2023 merger guidelines. They've retained the HSR rules that were pushed out by the last uh administration. Uh, they've kept on the books a prior approval policy, which is a little bit in the weeds. Antitrust nerds speak for whenever you kind of enter into a settlement in a merger with the government. A prior approval provision gives the FTC the right to give a pure thumbs up or thumbs down of whether they approve the buyer's acquisition in that same market in the future for 10 years on paper. That policy has been retained, although uh implementation has been inconsistent. So maybe not, um maybe more on paper than in enforcement. Uh the healthcare statements that covered ACOs, information sharing, and some other things uh that were repealed by the last administration have not been uh re-implemented or any plans to restore them been mentioned. Uh, antitrust guidelines for business activities that really covered labor issues, which we'll get into later. Uh, that came out just before uh President Trump's inauguration and over the objections of Republicans, but that policy remains in place. So we've really seen a mixed bag on the policy front of things that have changed and things that are um consistent and haven't changed from the last administration. So I think um that's our number 10 development for 2025. And I'll turn it over to you, John, for number nine.
SPEAKER_02:Sure. So to get a little bit more specific, as Alexis previewed, one of the changes, or one of the developments rather in 2025, that frankly to me was a surprise and impacts the healthcare industry uh as much as any other, is the fact that the agencies, the federal agencies, the DOJ and the FTC, kept in place the dramatic expansion of the Hart Scott Redino Act rules. So for those of you who are not practitioners, if you are uh parties to a deal of a certain size and scope, um, the agencies get a preliminary view prior to close of that transaction and can assess the competitive effects of it. And the information that parties have to each give with respect to that transaction and about their own businesses is called an HSR form. That form um had not been really changed much in quite some time, decade plus. And um the Biden administration had proposed new rules that had expanded it by the FTC's own estimation, at least 4x in terms of the time that it would take to provide the information and the amount of information itself that would need to be those rules were finalized February 10th, 2025, um, certainly after Trump had been inaugurated and after you know, he could have had his administration could have had the power to place them and hold to reduce to scale them back, etc. And so for healthcare clients, you know, I know um there's a lot of information that's called for these, particularly for health systems, that doesn't fit neatly into those requests in terms of you know identifying supplier uh relationships, vendor relationships, things like that. It's been a lot of fun. That's my only editorial comment with respect to the new HSR rules, but certainly something that has been um a big part of antitrust merger practices and with respect to healthcare and life sciences. Um, they've been dealing with those new rules as well. Turning it back to Alexis for number eight.
SPEAKER_00:Number eight is a uh merger litigation challenge brought by the FTC against a couple medical device manufacturers. This is actually the second uh merger litigation filed by the Trump 2.0 FTC. This one was filed in August to block the Edwards Life Sciences acquisition of Genovalve technology. Uh, in that case, the FTC said that Edwards had agreed to acquire Genovalve uh within days of agreeing to acquire another company, a competitor, JC Medical. Um, both uh Genovalve and JC Medical are developing uh transaortic valve replacement devices for the treatment of uh aortic regurgitation. I'm sure uh folks from the healthcare industry will know what those are. Um, but we'll call them T T A R VR AR devices. Um and what's interesting, one of the things that's interesting is that this is really an innovation case where, as most merger challenges are about products that are already on the market, this these are about two products that are in development that have not been FDA approved yet, uh, or in the midst of that process. And the agency's uh claims focus on the harm to innovation competition that also says it'll diminish quality and potentially increase prices. Um, usually price harm is usually the lead theory in a merger case, but here where you don't have products on the market yet, and products may or may not even have planned pricing to go to market. Um, the focus here on this case is innovation harm, which is an interesting aspect of this case. Um, and apparently, according to the complaint, which gets repeated notably a few times in the complaint, um, the parties rejected the FTC's urging that they divest the previously acquired firm JC Medical. Uh defendants say that no court has ever blocked a deal where the products are regulated products that are still in development, and that the combination of these two firms combines complementary capabilities and really is the best chance to resolve some uh manufacturing issues that uh the target company Genovalve uh apparently or purportedly has. Uh, this case is pending, but really an interesting um case in terms of the development of innovation competition law uh in the merger context. So um certainly both a key development for 2025 and certainly also one to watch in next year as well. John, think about that next.
SPEAKER_02:Sure. So turning to number seven, non-competes. In the news a lot over the last couple of years. And some of some of you may have noticed that you know, just a couple of months ago in September, um, the FTC dropped its its defense of the non-compete rule, which had been challenged in a few places, a couple of places, including in the Fifth Circuit. Um, but they are not finished when it comes to the non-compete issue. Um and so they've issued a request for information and letters that are focused on healthcare employers. We're gonna talk about this a little bit more. I don't want to spoil uh what we're looking forward to, but uh you know, healthcare antitrust competition issues and non-compete, certainly not going anywhere. Um, but it was a big development in 2025 that the FTC uh took steps to dismiss its appeal uh and to not enforce the national rule. Turning it back to Alexis for number six.
SPEAKER_00:Sure. This is uh involving the multi-plan class actions, uh, these are class actions filed by healthcare providers against uh multiplan and a group of payers alleging that they had illegally fixed prices of outer out-of-network provider rates. And the allegation is that instead of using usual customary and reasonable benchmarks based on publicly available pricing information, charge data in particular, that multi-plan had this algorithm that combined uh these insurance out-of-network rates, and that the plans allegedly stopped competing with one another to negotiate out-of-network with providers, and instead delegated their negotiation of rates and the actual out-of-network rates to multiplan and its um algorithm. Um, defendants uh in the case filed the motion to smith arguing, among other things, uh, that actually this multiplan offered a new product, offered another alternative option for insurers to calculate out-of-network rates. And this had the effect of actually lowering rates uh to payers, and ultimately those savings would be passed on to patients. Uh, the DOJ uh not a party to the case, but filed a statement of interest in the case. And in that statement of interest, argued, didn't take a position on the merits, but said that use of a common algorithm to set any aspect of price, either a starting price or a maximum price, can be concerted action that constitutes price fixing or restrative trade, a section one violation of the Sherman Act. Um, even if the insurers in this case retain some pricing discretion, and even if their end out-of-network rates varied among one another, uh the out DOJ also took the notable position that information sharing through a third party can still violate section one of the Sherman Act. Uh, so in June, the court, the district court rejected the defendant's motion to dismiss the case, uh, saying really less so about using the algorithm because it wasn't clear that confidential pricing ratios being included in the algorithm, but more that communications between the defendant, insurers, and multi-plan had exchanged price information and communicating price information with your competitors was against your self-interest, which might suggest an unlawful agreement. And that even if savings were uh passed on to consumers, that wouldn't justify a per se unlawful price fixing agreement. So that was the basis for rejecting the motion to dismiss. So that case is ongoing, but certainly a notable development in that class relating to information exchange, you know, outsourcing of administration of rates and negotiation of rates and even algorithmic pricing. So uh again, another case of big development this year, but one that we'll continue to be monitoring uh next year as well. Uh John, let me turn over to you for number five.
SPEAKER_02:Yeah, so number five is interesting, and I think is consistent with um the theme that Alexis laid out at the beginning with Trump 2.0, which is you know, um, we've been surprised, I think, both of us as practitioners, just how active the Trump administration 2.0 has been with respect to federal antitrust enforcement, and healthcare is no exception to that. So with that wind up, number five is the launch of the anti-competitive tax task force by the agencies. You know, back in the early part of the year, um January 31st, to be precise, Trump had signed an EO and executive order, uh stating that the policy of the executive branch was that the federal agencies should, quote, alleviate unnecessary regulatory burdens placed on the American people. Um, subsequent to that, he signed another EO that directed agencies to review all identifications and identify regs, then among other things, quote, impose undue burdens on small businesses. And consistent with that, the antitrust division was going to be, you know, part of that. And so then um flash forward uh a couple of months into the spring, and an anti-competitive regulations task force was launched to look at regulations in a number of industries, housing, transportation, et cetera. But healthcare, right? This is a healthcare antitrust podcast. Healthcare is one of them. And the language here, um, and public comment, by the way, was open until the end of May. Um, language here uh with respect to healthcare states that laws and regs, regulations in healthcare markets too often discourage doctors and hospitals from providing low-cost, high-quality health care, and instead encourage overbilling and consolidation. These kinds of unnecessary anti-competitive regulations put affordable health care out of reach for millions of American families. So, this is a statement from you know uh Trump's Justice Department with respect to consolidation and health care. The public comment period, there were a lot of comments that came across. Imagine the agencies are digesting them. Um often what we've seen is where there are these investigations or these public comments or RFIs, whatever they are from the agencies, that what follows is some sort of some form of action. And so we'll be looking to see what happens um next in terms of anti-competitive um uh regulations that were identified by the task force. And then I have the pleasure of going next uh for number four. Number four is a bit more specific, which is um the emeticis united transaction. Um that finally settled uh not that long ago. Uh, you know, home health transaction, it settled in in August 7th, on August 7th of this year. And, you know, for those of you who may not be following with bated breath every development in Antitrust, you know, one change that was fairly notable under um the Biden administration was, I guess to put it mildly, a reluctance for settlements, divestitures to remedy um concerns and transactions. And so this was kind of back in settlement land, um big divestiture, 164, I think, um uh uh uh businesses that need to be divested. Um there's a lot of information on this that's publicly available, uh large significant transaction that got to close. Um, and the parties are now in the process of divesting a lot of assets. So that was number four. And happy to turn it back, Alexis, to you for number three.
SPEAKER_00:All right, number three is a case uh unsuccessfully challenging another medical device case. Uh, this one was filed in March by the FTC and a handful of state AGs that sought to block uh GTCRs, a private equity firm's acquisition of SERMOTICs. Um, this is a case where the government alleged that GTCR had a subsidiary biocoat and combining biocoat and stromotics, uh, which both um provided outsourced hydrophilic coatings. These are coatings that go on medical instruments that are inserted in the body, and the coatings obviously help those instruments go in more smoothly and cause less damage to the body. Uh, the government in that case was alleging that combined the two firms would have a combined 60% market share for outsourced hydrophilic coatings, and as a result, the usual allegations of higher prices, lower quality, harmony innovation would result from the transaction. Uh, the defendants in the case raise a couple main arguments. One is that the FTC got the market wrong, um, that the parties um either were in different markets because they provided two different types of hydrophilic coatings, one based on thermal curing of those coatings, and the other based on UV light curing of those coatings, or that the market was under-inclusive because it was only capturing the outsourcing of the coatings as opposed to including the coatings that were able to be in-sourced by uh OEMs who could do this in-house themselves and just coat their own instruments and devices. Uh, the other main argument was that the parties had proposed just before the case went to trial that they would divest a number of assets of biocode to a divestiture by or integer that eliminated the competitive concern. And in November, we got a decision on the preliminary injunction motion, the case in the district court in an oral ruling and no intent to issue a written opinion. So that's kind of notable. Um, the district court denied the motion for preliminary injunction. Uh, in the case, the F the court said that the government's market definition was too narrow and including just the outsource hydrophilic coatings. It should have included um captured. The in-source availability of OEM to in-source uh hydrophilic coatings. Um, even so, it was kind of interesting. The court still said that the plaintiffs had sufficed, uh, sufficiently alleged prima phase share, met their prime case. I'm not sure how that um works. Usually, if you don't define the relevant market correctly, that kind of ends the case. But in this case, the decision went on. Uh, the court went on to say that the market shares were overstated by the government and that the defendants' market share calculations reflected the commercial realities more accurately, and those shares were you know much, much lower, less than 30%, uh, relative to what the FTC and the states were alleging. And finally, the court was convinced that the divesture would resolve any competitive concerns, and the court um was convinced that the divesture buyer was adequate and had the uh intent to compete in the market. So, this was the first uh filed merger litigation filed by this Trump 2.0 FTC, and it was the first loss by the FTC. So I think it's an interesting case. It also shows that you know defendants are able to defeat the government and market definition, challenge their market share calculations, and litigation, litigating the fix is still um a viable way to challenge or uh defend your your merger, and that seems to be uh succeeded here. So that was number three, and number two goes over to you, John.
SPEAKER_02:Yes, and the government also um with respect to defendants has gotten some wins in criminal cases, right? So number two is um the United States against Lopez, USV Lopez, where uh the division, the antitrust division of the Department of Justice, got their first big criminal conviction or first criminal conviction uh for nurse wage fixing. Um this is a a healthy reminder to our audience that antitrust is not just about deals, it's not just about litigation, but that the antitrust laws um also have criminal liability. Uh and so this was a case against um someone who was alleged and then convicted of conspiring to fix the the wages of nurses. This is someone who was then sentenced to, I believe, 40 months in prison and uh who um also convicted uh and is going to pay over$3 million in fines and restitution, as well as having to pay back um, I think the$10 million or so from the allegedly uh fraudulent sale of his business. So um US US against low USV Lopez, um, wage fixing with respect to nurses, editorial comment here. Um I think we would any Anitrust practitioner would advise clients to be very careful when it comes to information sharing and certainly not agreeing, not just on some of the things you may be thinking about, but also with respect to compensation, as there can be potential liability. So, Alexis, you have the honor of number one in 2025. I'll turn it over to you for that.
SPEAKER_00:Number one. So I where we landed on this, and I suppose there's always up for debate. Um, but number one, uh, this year we have the Blue Cross Blue Shield settlement uh in the provider case. This is a settlement that was received final approval in August from a district court judge in Alabama. It's a$2.8 billion settlement in a case that started way back in 2012 uh against the association and nearly three dozen uh member plans. Uh this settlement is again the provider class, uh, which is different from an earlier settlement that's going on about five years now, with that was 2.7 billion with employers and individual subscribers. Uh, we obviously don't have time to cover the case, but just as a super quick reminder, this really related to the allegation that the defendants had unlawfully divided up the country into exclusive territories, you know, so-called market allocation and antitrust terms. Um, and in addition to the multi-billion dollar uh monetary relief that settlement includes other preconditions on the association, make internal changes to operations to make them more transparent, more efficient, upgrades to technical capabilities, including millions of dollars in spending on improving uh claim systems and other conditions related to making uh data more readily available. Um, despite this uh very large monetary settlement, uh a number of providers have decided to opt out of the settlement and are bringing direct actions. So uh while this settlement is our number one development for 2025, this is yet another case that will continue on for uh at least into 2026, and if not for years to come. So that's our wrap on the top 20 top 10 developments for this past year, and we'll turn it over to John to kick us off on what we expect to be the top 10 developments in 2026.
SPEAKER_02:Yeah, so this is what we're watching, right? And this is a bit speculative, but just kind of forecasting. I mean, who could have predicted what happened in 2025? I I didn't go back and look at our track record, Alexis, but um you know, I should also point out and should have started this, this this is being recorded on um December 8th. And so uh wanna particularly emphasize this in case we're wrong. Anything that we're predicting. And in fact, I'll caveat it further by saying technically this is simply what to watch for. So we are not making any actual predictions. Um, these are just things we are monitoring for 2026. Number 10, midterm elections, right? Like we're both sitting here in Washington, D.C. Um, can't help but ignore, or can't help but not ignore, um, what's happening um politically here uh with our federal government. We have we have some very significant midterm elections coming up in the fall. And um look, antitrust is no stranger to congressional investigations. And so whether that is uh House Judiciary Committee investigation of a company, of an industry, of an agency, um, you know, depending on who takes Congress and who's in leadership, there could be a lot going on or there could be very little. So again, not predicting, um, but it is something that we are keeping our eye on and will be keeping our eye on uh over the course of the next year. Alexis, number nine.
SPEAKER_00:Number nine is uh, are we gonna have any more new FTC commissioners? Um, as I kind of alluded to earlier, on the president removed the two Democrats on the commission, and one of the Republicans uh departed for another post. Uh so there are now two Republicans left on the commission, which the FTC can operate that way and has before. That's sufficient for a quorum. Um, there's been reports uh that the president may nominate Ryan Bash to fill one of the Republican seats. Uh, he's um currently on the National Economic Council in the White House as a special assistant to the president for economic policy. Uh, apparently he focuses on tech and AI issues and other issues. And he previously worked in the Texas Attorney General's office. Um, but beyond uh it's not clear whether we're gonna get any more nominees. As I mentioned, there's a Supreme Court case being heard today uh for the uh one of the Democrats' uh former FTC commissioners that's trying to be restored to a position. And this case is really about whether the president has the authority to fire heads of independent agencies uh without cause. Um, and if the Supreme Court says he does, it's not clear that we'll necessarily have any uh Democratic nominees to the FTC. Um, and could certainly could see a certainly a big change uh at the FTC about what nominations look like both in this administration and going forward, about whether uh we see minority party commissioners being uh nominated and confirmed by any independent agencies, including the FTC. It's not clear what incentive uh they would have to nominate, but even if uh such minority party nominees got posted to the FTC, the president could presumably fire them without cause the next day if this case, Trumpy slaughter, goes the way uh many are predicting. So we'll all be watching what's going to happen with the leadership of the FTC uh going forward in the light of this Trumpy slaughter case. Um that's number nine, and you could really move that up potentially a higher up the list. But for number now, let's turn it over to John for number eight.
SPEAKER_02:Yeah, that's the fun with looking at things to watch for, right? It's hard to rank them because it depends on what happens. But um but just kind of sticking with the the political theme a bit here, the congressional theme. You know, there was a hearing back in, I think it was May in the um the the House Judiciary Subcommittee um on the administrative state, regulatory form, and antitrust. So I was calling them just HJC, and that wasn't quite accurate earlier. But this is, you know, one of the primary um groups really over in Congress that examines antitrust. And with respect to health care, um there's been concern, right, about um shortages with respect to providers, just particularly in rural areas, but just more generally. And so folks may not may not know, but there is um uh an exemption from antitrust because otherwise it would be independent actors getting together and agreeing on things they shouldn't agree on with respect to the residency, medical residency program. So there, you know, there's been a lot of noise around um ending that exemption. There was a a hearing on it, who knows what's gonna happen with Congress. Um, it concerns healthcare, and so those are the building blocks as to how we got to having this be uh something to uh take a look at uh and and and monitor. And we'll talk a little bit more about residency programs going forward by way of preview. But that's essentially why that uh that gets us to eight. Um Alexis, I believe number seven is all you.
SPEAKER_00:Yeah, this is um the Good RX class actions. Um, and it's really kind of a sister or cousin case, I guess, to the to the multi-plane case we mentioned earlier. This is um consisting of about a dozen class actions filed by pharmacies against Good Rx and four PBMs that represent about 64, according to plaintiffs, 64% of all filled prescriptions in the US. And what the plaintiffs allege in this case is that PBMs use Good RX's price aggregation algorithm to fix the prices that they pay for generic drugs dispensed by independent pharmacies. Um, basically, according to plaintiffs, PBMs are using this pricing technology in their claim systems. Uh, about 95% of uh PBMs representing about 95% of prescription claims allegedly participate in some form of information sharing with GODRX. And according to plaintiffs, this means that the PBMs through this Good RX system are basically pay the lowest price that any PBM has with the pharmacy for the generic prescriptions. Um, therefore, the plaintiffs say uh the the rates that paid the fees paid to independent pharmacies by PBMs have gone down. And rather than compete for those payments, they're using Good RX to align their pricing. Um these cases were recently consolidated in a Rhode Island NDL. Um, again, this is just another in a line of cases kind of relating to algorithm prices, using a third party to manage pricing uh to counterparties um in the in the payment system. So another area for really anyone in the healthcare industry to watch uh when it comes to payments, GPOs, PBM issues. So uh a continued uh area to watch in 2026. That takes us to uh John's next one at number six.
SPEAKER_02:Yep, number six. By way, you know, we previewed it 20 minutes ago or so. What's gonna happen with non-compete, right? I mean, we've got different layers to non-compete enforcement. There's sort of state law, contractual enforcement, right, private litigation. Um, but you know, more in the arena of federal antitrust enforcement. You know, we we just don't know what's gonna what's gonna happen since the FTC, you know, um voluntarily uh dismissed its case a couple of months ago, as I said, in the I think at least in the Fifth Circuit. And so, you know, this is something where notwithstanding its uh dismissal, the agencies said that they're gonna, you know, take, I think it's to use the healthcare metaphor, more of a scalpel when it comes to non-compete, um antitrust enforcement. They believe in their authority. Um, they believe that um that non-compete in certain instances are anti-competitive. And so this isn't something that's just completely gone away. Um, the question is, um, what's it gonna look like? What's this enforcement gonna look like? Is it going to be part of a merger investigation, a settlement pursuant to that, right? Is it going to be just an outright, you know, investigation of a non-compete arrangement by a you know a healthcare company of some sort? And what authority is that going to be brought under? I mean, to get a little more specific on the antitrust, you've got you know uh authority to enforce section one of the Sherman Act, certainly by DOJ, or section two if the healthcare company were to allege to have market power. But then we've got section five of the FTC Act, which is under um, you know, almost seemingly decades-long discussion around the scope of that authority to bring actions with respect to unfair competition and whether that sort of exceeds the FTC's authority beyond what's coextensive with the antitrust division. So, with all that, uh I think it'll be interesting to see, and we'll be watching, um, kind of what happens with non-compete enforced enforcement, uh, particularly in the healthcare space. Alexis, back to you to start us off in the top five.
SPEAKER_00:Yeah, the the section five mention is a good segue to this next uh item watch for next year, which is the FTC's case against uh PBMs and administrative litigation. Um this was a case started by the Biden FTC, sued three large PBMs and their affiliated GPOs. Uh, it was filed in as an administrative case, so not in federal court. And the FTC is what we call part three administrative trial process. And in that case, the FTC alleges that the PBMs um extracted higher rebates or sorry, extracted, yeah, higher rebates through exclusionary drug formularies, formularies related to insulins. Um, basically, in what the FTC calls a chase the rebate scheme, uh, the FTC says that these rebating practices incentivize or encouraged and resulted in higher list prices because, in order to secure higher rebates, PBMs exclude lower cost insulins from formularies in favor of higher cost drugs and a result consumers were paying higher prices. And what's notable, or one of the things that's notable about this case, is not uh the FCC not alleging any Sherman Act violations, but a pure section five claimed uh that these rebating practices constituted an unfair method of competition, as well as an unfair act or practice under section five of the FTC Act. Um, case originally stalled for a little bit due to commissioner recusals. Chair Ferguson unrecused himself, so the case picked back up again, and the defendants have filed a motion to dismiss, uh, raising a bunch of defenses, failure to find a relevant market, failure to allege any harm to consumers, failure to tie the rebating practices to the um to the harm. So that motion to dismiss is pending, but obviously, given sort of widespread concern about the pricing of pharmaceuticals across parties across Washington and across the country, I think this is one case to continue watching as sort of another way that um the administration seems to be trying to tackle uh high cost of prescription drugs, but certainly an important case uh also for any trust uh purposes in terms of the FTC's Section 5 authority. So that's number five. Let's turn it over to John for number four.
SPEAKER_02:Yeah, so a bit a bit more nascent, but there have been several class action lawsuits um filed earlier this year, um, alleging, you know, a number of systems that um alleging that the uh pharmacy residing map residency match system. So maybe not something that's subject to that exemption, no editorial comment. Um, whether there's uh you know, there were this violated antitrust laws through the suppression of low wages. Um sorry to give the short shrift, but you know, something that's just filed, something to keep our eye on, and we'll see sort of what happens in the class action space here as we um get into 2026. So sorry to be so quick, Alexis, and put you on the spot back for number three.
SPEAKER_00:Yeah, this is another NASCAI case, so this will be relatively short too. This uh relates to contracting uh practices by hospital in New York, and there's been uh a report in the New York Times that the DOJ is investigating New York Presbyterian's contracts, which allegedly include some anti-steering and anti-teering provisions. We've also seen a case filed uh in September by a union uh related to these um contracting practices that the hospital's contracts allegedly included anti-steering provision, all products clauses, and terms that um allegedly suppress price transparency. These are um issues we've seen in prior cases. We saw them in the DOJ and North Carolina case against what was then called Carolina's health care that ultimately settled. We saw this in California when the AGE and some private cases sued Sutter Health. Those cases have now been settled. So it'll be interesting to watch this particular case, but also whether we see more antitrust enforcement against providers contracting practice, especially multi-hospital systems, um, where they may negotiate all their hospitals together and whether we continue to see an increase uh in in complaints or concerns about these uh types of contracting provisions. So that was number three. And John, you have number two.
SPEAKER_02:I do. Um happy to be talking second to last about what we're gonna be looking at. So, you know, folks may remember, you know, the the roll-up action FTC brought against a private equity firm and you know, some in the anesthesia space. Um, forgetting, at least, you know, frankly, even I kind of forgot a bit that there was still the action by the FTC against USAP, US anesthesia, anesthesiology, anesthesia partners, forgive me. In fact, just you know, just recently, right, there were some motions regarding um the shutdown. Now the FTC is back, um, as are the rest of the agencies, uh, alleging sort of different monopolization claims that that that USAP um grew of a certain size illegally. Um, and so look, we'll see you know what happens on this case as well. Um, sort of consistent with our theme, I guess. Big picture, it's what's the government gonna do? Um, what's gonna happen on actions the government's already taken? And then what's going to happen um in cases that have been being brought? The the harder thing overall, kind of just pulling back from these the the the list and specific actions is you know, we don't know what's gonna be filed, right? And I mean, if we do, then Alexis and I aren't saying anything. About non-public actions we're involved with, certainly. So that's the big sort of number 11 Alexis. I'm not trying to steal your thunder from number one, but of course, you know, there could be any number of interesting pieces of litigation filed in the healthcare space. It's a complicated industry, um, filled with you know a lot of players with a lot of different types of incentives. There are all sorts of deals that could be announced, and um the government's always hard to predict. So we'll be watching for a lot more than just this top 10 list. But um, I think this at least through uh as Alexis takes us home with number one, um, those are sort of the themes that that we've been seeing from the last year and looking forward into the next one.
SPEAKER_00:Maybe this reflects a little bit of our merger practice bias, but uh we selected our uh number one topic to be uh the seeming proliferation of state mini or baby HSR bills and laws being passed. Uh, as folks may know, more and more states are passing pre-merger notification filing requirements uh, you know, beyond what is currently required under the Federal HSR Act. I think currently there are about 15 states or so that require pre-merger notice requirements for healthcare deals in particular. There's a couple states, Washington and Colorado, that recently passed legislation that requires parties to submit copies of their HSR filings if their state-specific thresholds are met. And one thing that's you know can be challenging for merging parties that the given this proliferation of state laws is that a lot of these requirements in the states are different in terms of which transactions require notification, what is required in the notification, what is the timeline for the review, period to the extent it suspends closings. So there's a lot, and this obviously makes things more complicated, more time consuming, and more costly for merging parties, the more and more of these that are passed by the states. Um, so one thing to watch in 2026 is if we continue to see this trend across states, uh, how states go about implementing these laws and how it affects the merger view uh process for merging parties. And in turn, you know, what does this mean for state enforcement of mergers enforcement? We already see a time AGs are as active as ever in merger enforcement, and certainly these laws would seem to give them uh a greater ability to be even more active uh in examining and potentially challenging mergers, particularly in the healthcare space. So that's certainly the area we think bears watching in 2026. So that's our uh totally objective, no room for argument list of uh things to watch in in 2026. But John, defer to you on how to close this out.
SPEAKER_02:Really appreciate it, Alexis. It was uh the eighth time, you know. I think they keep getting better. So congrats on your move. Um and we look forward to speaking with you in just about a year. Take care, everybody. Thanks so much.
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