Navigating Antitrust Laws

This week, the pharmaceutical industry witnessed an intriguing development. Roche has joined Eli Lilly and Company in opposing Novo Nordisk's planned acquisition of manufacturing plants from Catalent Pharma Solutions, one of the biggest contract manufacturers in biopharma. The deal, which could significantly boost Novo's capacity to produce its in-demand GLP-1 drugs Wegovy and Ozempic, is under antitrust review by the Federal Trade Commission (FTC). Why is this significant? - Meeting Soaring Demand: Novo's GLP-1 drugs are in short supply due to unprecedented demand. Acquiring Catalent's facilities could alleviate these shortages and get treatments to patients faster.    - Competitive Dynamics: Lilly, whose competing drug just came off the official shortage list, has heavily invested in expanding its own manufacturing capacity. Roche, too, has anti-obesity drugs in development. By opposing Novo's deal, they could be aiming to maintain a competitive edge. - Market Implications: Capacity constraints have become a defining characteristic of the anti-obesity drug market, overshadowing even efficacy data. The opposition suggests that competitors are willing to leverage regulatory mechanisms to hinder rivals. - Antitrust Concerns: There's an argument that the acquisition could concentrate too much manufacturing and development capacity with Novo Holdings, potentially impacting the broader industry. What's particularly noteworthy is seeing major pharma companies actively urging antitrust regulators to oppose a merger involving a peer. Traditionally, the industry has viewed FTC interventions as overreaching, especially in cases that might not have attracted significant scrutiny in the past. Questions to Consider: - Are Roche and Lilly justified in their opposition, or is this a strategic move to limit competition?    - Could this set a precedent for future M&A activities in pharma, making antitrust challenges more common among industry players?    - What are the potential implications for patients if capacity constraints continue due to such regulatory hurdles? The stakes in the obesity treatment market are undeniably high. It will be interesting to see how this unfolds and what it means for the future competitive landscape. I'd love to hear your thoughts on this development. Feel free to share your insights and perspectives!

What do the new FTC merger rules mean for dealmakers in 2025? The Federal Trade Commission recently announced updates to its antitrust disclosure rules that will require organizations to consider potential competition issues much earlier in the transaction process. Here’s what leaders need to know:    📌 The new regulations will require companies to disclose additional documents including studies, surveys, analyses and reports prepared for certain leaders. Deal teams should put processes in place to collect these documents early in the planning process.    📌 Be prepared to provide synergy and efficiency reports that highlight how the deal will deliver non-anticompetitive efficiencies and cost savings that benefit consumers.    📌 Be proactive about analyzing a transaction’s competitive impact and developing your deal rationale as this will be required earlier in the process and could change how companies determine which deals to pursue.     CFOs that embrace proactive planning can ensure regulators understand the full deal thesis, ultimately streamlining the dealmaking timeline and achieving transformation objectives. https://lnkd.in/eJcmtxFj

Google and Meta are fighting for survival in federal court. They built trillion-dollar empires that transformed how we live. But the same strategy that made them giants could tear them apart. Here's how the Big Tech landscape is changing in 2025: Google just lost its second antitrust case in 8 months, with a judge ruling that Google has been operating an illegal monopoly in the digital ads market. Meanwhile, Meta executives are testifying under oath in their own FTC trial. These aren't ordinary lawsuits; they're existential threats that could force both companies to break up. For Google, the court found that it built a system requiring publishers to use its ad server to access its ad exchange. Bundling products in this way leverages dominance in one market to control another. For Meta, the FTC is examining whether the acquisition of Instagram and WhatsApp eliminated competition. On the stand, Zuck argued: • Meta helped Instagram grow bigger • TikTok and YouTube prove competition exists • They failed to buy Snapchat (so they can't be that dominant, right?) But prosecutors see a pattern of systematically eliminating rising competitors. These cases mirror the Microsoft antitrust battle from 20+ years ago. Microsoft began with brilliant innovation before leveraging Windows to dominate the browser market. In the aftermath of the Microsoft antitrust case, the tech ecosystem became more diverse, which paved the way for companies like Google to emerge. The current antitrust actions raise important questions about the future of tech: • How do we balance competition with market growth? • When do acquisitions cross from strategic to anti-competitive? • How should tech leaders adapt to new regulatory realities? The answers aren't simple. What we need isn't a winner-takes-all approach, but thoughtful dialogue between diverse perspectives. Check out the full story with: - Videos - Images - Commentary Here: https://lnkd.in/e2hs32Uj - Thanks for reading! I'm Baptiste Parravicini: • Tech entrepreneur & API visionary • Co-founder of APIdays, the world's leading API conference • Passionate about AI integration & tech for the greater good Want more on becoming the future of tech? Check out the comments ⬇️

Cigna Healthcare just reported its Q2 2024 earnings, and the numbers are... well, I guess it depends on your perspective. Shareholders are happy. Total revenues jumped by 25% compared to Q2 2023, thanks mainly to Evernorth Health Services. Adjusted income from operations saw a 5% boost, with Evernorth and Cigna Healthcare leading the charge. They've also trimmed down their SG&A expense ratio to 6.0% from 7.1%. For me, one of the standout figures is the 24% increase in total pharmacy customers, now at 122.5 million. Is Evernorth that good? I have yet to hear glowing reviews from any employer about how they are lowering their costs or that their customer service is worth the price tag. If there is a good reason for this remarkable growth - I'd love to hear it. But I'm guessing this "organic" growth is the result of Cigna telling its customers that they MUST use Evernorth, or face pretty stiff contract terms that would make it prohibitive to use anyone else. I've seen this first hand, and I know many of you have, and it seems to me that this might be the perfect time for regulators and law-makers to revisit the legal concept of "tying" and focus on these vertically integrated healthcare giants that are forcing their services down employers' throats. In antitrust law, tying is generally defined as an agreement by a party to sell one product (the tying product) only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier. This practice can substantially restrict market competition and limit consumer choice. Employers might feel compelled to use Evernorth for PBM services due to Cigna's contractual terms, effectively locking them into Cigna's ecosystem and preventing them from exploring more innovative and transparent PBM providers. Historically, tying arrangements have been scrutinized under antitrust laws designed to preserve competitive markets and protect consumer interests. A prominent example is the United States v. Microsoft Corp. case, where Microsoft was found to have used its dominant position in the PC operating system market to tie its Internet Explorer browser, thereby restricting competition. Ironically, Cigna's acquisition of Express Scripts, now rebranded as Evernorth, was approved by the Department of Justice in 2018. At the time, the Antitrust Division concluded that the merger was unlikely to harm competition or consumers. They believed Cigna’s PBM business was relatively small and that sufficient competition would remain in the PBM market. They also determined that the merger wouldn’t enable Cigna to increase costs to its health insurance rivals due to existing competition from other PBMs. Oh, the irony. While the PBM industry is feeling the heat for their business practices and anticompetitive conduct, we might as well address this issue while we are at it!

I recently spoke with Fox News Media about the latest regulatory shake-up, and one thing is clear—antitrust is still the real fight. #Trump just wiped out a slate of Biden-era lawsuits on DEI and financial regs. But antitrust enforcement? Left untouched. That’s not just a footnote—it’s a signal. Here’s what this means for dealmakers: ◾ Regulatory relief in some areas – Fewer compliance hurdles in hiring, financial regulations, and social policy cases could streamline operations and reduce legal uncertainty. ◾ #Antitrust scrutiny isn’t going anywhere – The FTC and DOJ are still coming for big deals. With Trump leaving these lawsuits in place, bipartisan pressure on M&A remains high. Expect more blocked deals, longer approval timelines, and greater pressure to prove competition benefits. ◾ Deal strategy needs to evolve – The old playbook won’t cut it. Acquirers need stronger deal theses, clearer pro-competition arguments, and earlier regulatory engagement to stay ahead. So..less red tape in some areas, but when it comes to deals, regulators still have the scissors ready. Is dealmaking really getting easier, or just changing shape? What do you think?

Today's contract tip is about issue-spotting for potential antitrust and competition law violations in deals between competitors. One common type of competitor collaboration is a co-marketing agreement. In these deals, companies agree to work together to expand their marketing and sales efforts. Our antitrust radar needs to go up when these deals are between competitors. Here are the terms that I usually escalate to antitrust lawyers for further input and review: 1. Restrictions on doing business with other competitors I watch for any deal that prohibits a party from working with a competitor or selling a competitor's products. These can be deemed against public policy depending on the length, scope, and market share of the entities involved. 2. Collaborating with your competitor I also look for any information sharing among competitors. A red flag should go up anytime you have a contract sharing product, pricing, and customer information with your competitor. 3. Any predatory pricing strategies I also evaluate whether the parties offer steep discounts that depend on purchasing both parties' products. If these discounts are loss leaders (i.e., less than the cost of the good), the deal might be viewed as a collaborative effort to eliminate competition. What others would you add? #PoorBob #HowToContract #contracts #lawyers #law

Now this is a well-named task force: Task Force on Health Care Monopolies and Collusion (the “HCMC”). From the article: The U.S. Department of Justice's Antitrust Division sharpened its focus Thursday on healthcare platforms that combine doctors with insurers, data and more in what the administration's top competition official called the "alarming" accumulation of assets. These are multisided giants that are accumulating assets at an alarming rate," [Assistant attorney General Jonathan] Kanter said, asserting that instead of separate lines of commerce, healthcare is increasingly coming under the purview of "a coordinated stack" of platform companies combining different industry sectors. He pointed among other things to insurance companies buying up healthcare providers "at an extraordinary clip," amid a data boom where algorithms are playing an increasingly prominent role in how healthcare is provided and priced. The HCMC will consider widespread competition concerns shared by patients, health care professionals, businesses and entrepreneurs, including issues regarding payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, health care IT services, access to and misuse of health care data and more," the DOJ said in announcing the task force. "The HCMC will bring together civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, investigators and policy advisors from across the division's Civil, Criminal, Litigation and Policy Programs, and the Expert Analysis Group, to identify and address pressing antitrust problems in health care markets." Full article attached. Feels like all of a sudden a lot of things are happening. Exciting times for those working to change our current system.

A big challenge in anti-trust is proving collusion. To make matters more tricky, what if collusion can happen even without intentional actions? That's more likely in the digital economy driven by algorithmic decisions. An excellent paper by In-Koo Cho and Noah Williams studies this theoretically and conducts some simulations. They're motivated by the introduction of the Preventing Algorithmic Collusion Act in February 2024 by Senator Amy Klobuchar (D-MN). This legislation aims to strengthen antitrust protections by addressing how algorithms might tacitly collude, potentially raising prices on goods and services like rent and rideshares. However, as this paper argues, distinguishing between collusive outcomes (prices above competitive levels) and the mechanisms leading to them is essential. In other words, the reason why matters. Traditionally, collusion requires factors like communication between firms, agreements—whether explicit or tacit—and patient strategies where firms prioritize future profits. But the model presented here demonstrates that even myopic firms, without any explicit communication or agreement, can reach collusive outcomes simply through their algorithmic interactions. In particular, they show how endogenous algorithmic selection and adaptation, combined with market dynamics, can lead to price increases resembling collusion, even in the absence of collusive intent. This builds on prior research showing how algorithmic interactions can result in collusive-like pricing dynamics. Earlier studies often relied on simulations, predefined assumptions about algorithmic behavior, and strategic complements in duopolistic markets. In contrast, this model takes an analytic approach, allowing firms to adapt their algorithms dynamically. Each firm updates its pricing strategy based on its observations of the market, employing both "Nash reaction" and "linear reaction" specifications. One key finding is that if firms strictly adhere to Nash equilibrium strategies, collusion does not occur. However, when algorithms are allowed to incorporate feedback mechanisms, recurrent price increases to collusive levels become possible. This shows the complexity of algorithmic interactions and the challenges they pose to regulatory frameworks. The paper provides a critical lens on how algorithms in duopolistic markets can unintentionally mimic collusive behavior. It calls for a nuanced approach to regulation, balancing innovation in AI-driven pricing with the need to protect consumers from unintended but harmful price increases. Read the paper in full! #Antitrust #AlgorithmicCollusion #AIRegulation #CompetitionPolicy #ArtificialIntelligence

Navigating HR in Antitrust Waters 🌊 It's hard to recruit top-talent. I am hearing from HR professionals that attracting and retaining talent is tougher than ever. Wages are surging, resignations are soaring, and job vacancies outnumber seekers. Depending on your point of view, one can argue that it doesn't help that many states mandate pay range disclosures. Some of my HR people have told me that this is actually creating a much more costly labor market. Maybe that's a good thing, maybe not. 🤔 💡 Antitrust Awareness: Amidst these challenges, HR professionals must tread carefully on antitrust law. The Sherman Antitrust Act, born in 1890, aims to ensure market efficiency and protect consumers. Section 1, prohibiting "unreasonable" restraints of trade, applies to labor markets, too. ⚖️ In 2016, the Department of Labor and the Federal Trade Commission published a guidance document titled: Antitrust Guidance for Human Resource Professionals. I have attached a copy to this post. Although the document is from 2016, it has real applicability today, and is a little-known resource. Below are few areas addressed in the Guidance Document and reflect the positions of the DOJ and FTC. According to the DOJ and FTC: 💰 Pay Fixing: Competitors can't agree on employee pay—it's considered price fixing. Whether in similar industries or roles, any agreement on pay is a violation. ℹ Information Sharing: Even implicit agreements through casual HR discussions may harm the labor market. Sharing info leading to suppressed wages is against antitrust principles. 🛑 No-Poach Agreements: Restricting employee movement undermines a free labor market. Agreements not to recruit or hire competitors' employees, whether explicit or implicit, are prohibited. 📈 The Antitrust Landscape: Antitrust law gains prominence under FTC Chair Lina Khan's assertive enforcement. Increased regulations and actions against various companies emphasize the growing importance of antitrust compliance. 🤝 HR's Dual Expertise: While HR professionals are adept in employment law, understanding antitrust law is equally crucial. Navigating the complexities ensures fair competition, dynamic labor markets, and compliance with evolving regulations. With that said, anti-trust law is complex. Thus, employers should consider adding counsel that understands anti-trust law to their stable of resources. 🚀 Future-Ready HR: As HR adapts to evolving landscapes, staying informed on antitrust nuances becomes a strategic imperative. Employers can aide their HR team by providing the resources for HR professionals to properly consider anti-trust implications. #HR #AntitrustLaw #TalentManagement #Compliance #BusinessInsights #law #lawyer #hr #humanresources

Healthcare is supposed to be a system we can trust, but trust is exactly what’s missing. Antitrust laws were created to protect competition, ensure fairness, and promote innovation. In healthcare, they were meant to prevent monopolies, lower costs, and improve access to quality care for everyone. But instead of fostering trust and equity, antitrust enforcement has allowed consolidation, opacity, and inequity to thrive. Patients face surprise bills and soaring costs, independent physicians struggle to compete, and underserved communities are left behind. In this article, I explore how the failure of antitrust enforcement has not only rigged the healthcare system but also deepened existing inequities. More importantly, I argue that thoughtful reforms to antitrust laws could help rebuild trust, transparency, and fairness—while addressing the structural disparities that harm the most vulnerable populations.