Life Sciences Horizons Brochure 2025 - Flipbook - Page 55
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2025 Horizons Life Sciences and Health Care
Health care joint ventures: Navigating antitrust risk in a void of guidance
Health care providers (HCPs) have long partnered
with each other through independent physician
associations, clinically integrated networks, group
purchasing organizations, service line joint ventures,
and other collaborations to provide better access to
quality and affordable care to the communities they
serve. For almost 30 years, HCPs have been able to
rely on policy statements issued by the United States
Department of Justice's Antitrust Division (DOJ) and
the Federal Trade Commission (FTC) for guidance on
structuring these arrangements and conducting
joint activities in compliance with Federal antitrust
laws. However, over the last two years, the DOJ and
FTC rescinded much of their guidance for
competitor collaborations.
Federal antitrust law generally prohibits agreements among
competitors that unreasonably restrain competition. Although
some agreements are per se illegal (e.g., agreements to fix prices
or allocate customers, territories, or services), most collaborations
among competitors are evaluated under the “rule of reason” to
determine whether the agreement harms competition. The rule
of reason requires a fact-specific, detailed analysis; and guidance
from the DOJ and FTC has helped health care entities assess their
collaborations with competitors. Under the Biden administration,
however, the DOJ and FTC withdrew the following guidance
statements, leaving health care entities without clarity about
their collaborations with other industry participants:
DOJ and FTC Antitrust Enforcement Policy Statements
in the health care area (1993) and Statements of Antitrust
Enforcement Policy in health care (1996), which, among
other guidance, provided safety zones for certain hospital
mergers, joint ventures to purchase expensive health care
equipment, exchanges of anonymized historical price and cost
information, joint purchasing arrangements, and physician
network joint ventures;
Statement of Antitrust Enforcement Policy regarding
Accountable Care Organizations participating in the
Medicare Shared Savings Program (2011), which established
safety zones for certain ACOs and provided guidance for ACOs
outside of the safety zones; and
Guidelines for collaborations among competitors (2000),
which provided a safe harbor for competitor collaborations, in
any industry, when the collaboration and its participants
collectively comprise less than 20% market share.
Despite the current void in guidance, partnerships are often
necessary in health care to reduce costs, provide value-based
care, and reach traditionally underserved communities. As
HCPs consider new partnerships, structuring these relationships
to minimize antitrust risk will be important. In negotiating
collaboration agreements, parties should consider the antitrust
risk associated with their desired levels of financial, operational,
and clinical integration; the equity division among partners; and
the governance structure. Certain structures could require strict
firewalls, which could hinder the goals of the partnership. It
will be increasingly important in the future that antitrust and
corporate counsel collaborate; and many times, creative
structuring can minimize antitrust risk and support the
parties’ goals.
Ken Field
Partner
Washington, D.C.
Michael Snow
Partner
Washington, D.C.
Ashley Ifeadike
Associate
Washington, D.C.
