FTC erects additional administrative barriers to hospital mergers

Last week, the Federal Trade Commission (FTC) increased their required premerger reporting requirements for any healthcare providers such as hospitals. Healthcare Dive reports: Thursday’s update marks the first time the FTC has revised its Hart-Scott-Rodino Act premerger notification form in nearly 50 years.The law is intended to alert officials of companies’ intent to merge and…

FTC to sue PBMs over insulin pricing and rebates

From the FTC’s press release out today: Today, the Federal Trade Commission brought action against the three largest prescription drug benefit managers (PBMs)—Caremark Rx, Express Scripts (ESI), and OptumRx—and their affiliated group purchasing organizations (GPOs) for engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients’…

Has there been a decline in competition in the US?

This is a difficult question to answer. Consider the following world views: Decline-in-competition. Competition has declined because we observe increased market concentration, increased markets, decline in the labor share, and a lower rate of new-business formation at a macro level. Competition-in-action. If a few “superstar” firms in an industry grow by delivering greater value to…

Does physician-hospital integration reduce ACO cost?

The answer is ‘yes’ from a paper by Lin et al. (2024). Using 2009-2013 data from the Massachusetts All-Payer Claims Database, the authors measured physician–hospital integration within an accountable care organization (ACO) based on the proportion of primary care physicians (PCPs) in an ACO who billed for outpatient services with a place-of-service code indicating that…

The Corporatization of Independent Hospitals

That is the title from an interesting paper by Andreyeva et al. (2023). The abstract is below: Between 2000 and 2020, the share of US hospital bed capacity under multi-unit firms (systems) increased from 58% to 81% – a rapid corporatization of a sector with $1.3 trillion in annual spend. However, little is known about…

Vertical Integration in the Pharmaceutical Market

That is the subtitle of an NBER working paper by Charles Gray, Abby E. Alpert & Neeraj Sood. The author examine recent mergers between pharmacy benefit managers (PBMs) and health insurers. On the one hand, integration may beneficial to consumers. It could: (i) improve operational efficiencies, and (ii) better align PBM incentives with those of…

Competition in generic drug markets

There is even less competition then we may have thought according to a paper out this month by Socal et al. (2023): We identified a total of 565 facilities producing 1,379 unique generic APIs across forty-two countries. India, China, and Italy were the top producers; 14 percent of APIs were manufactured in the US. About a…