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Oversight of the Enforcement of Health Care Antitrust Laws

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Chairman Kohl, Ranking Member Hatch and other members of the Committee, I am David Balto, a Senior Fellow at the Center for American Progress where my work focuses on antitrust enforcement, intellectual property and health care. I am the former policy director of the Federal Trade Commission and have practiced antitrust law for over a quarter of a century. I am pleased to submit this testimony for today’s important hearing on oversight of our antitrust enforcement agencies.

We have reached a critical juncture in antitrust enforcement. Increasingly, the markets consumers depend upon the most—health care, consumer goods, telecommunications and airlines, just to name a few—are becoming more concentrated. The bulwarks of the competitive marketplace, choice and aggressive rivalry, have been diminished and many of these markets are plagued by deceptive conduct. Moreover, our typical reliance on an entirely “free market” unshackled from any form of regulation have been shattered by recent economic events. Increasingly, we recognize the need for more intensive and thoughtful regulation, as it is evident that the mantra, that deregulation or “regulation lite” is the best result is a recipe for consumer harm, not consumer welfare.

Fortunately, President Obama selected exceptional leaders for both the antitrust division of the Department of Justice and the Federal Trade Commission. Both Assistant Attorney General Christine Varney and FTC Chairman Jon Leibowitz bring a keen perception about the important role of antitrust enforcement as a bulwark to a competitive marketplace. Both are strong leaders who know how to make the most of the limited resources of their agencies and both are supported by talented career lawyers and economists who are dedicated to the mission of protecting consumers.

My testimony today provides observations on four important areas.

  • The role of regulation and the need for antitrust enforcers to support and strengthen regulation. This has been demonstrated by an innovative collaboration between DOJ and USDA addressing chronic competitive problems in agriculture markets.
  • The need for a realignment of enforcement priorities in health care to support health care reform. In particular, the need for far greater enforcement against health insurers and greater acceptance of collaboration by health care providers.
  • The need for the enforcement agencies to use their full range of powers especially when investigating and challenging conduct by dominant firms.

The need for Congress to enact new legislation to eliminate manipulation of the exclusivity period in pharmaceutical patent settlements, declare resale price maintenance per se illegal, and eliminate the antitrust exemption for health insurance.

Download the full testimony (pdf)

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