FTC Commissioner Ramirez Delivers Testimony on Key FTC Antitrust Enforcement Efforts | Practical Law

FTC Commissioner Ramirez Delivers Testimony on Key FTC Antitrust Enforcement Efforts | Practical Law

FTC Chairwoman Ramirez testified on behalf of the FTC before the US House of Representatives Subcommittee on Regulatory Reform, Commercial and Antitrust Law on the FTC's competition enforcement activities.

FTC Commissioner Ramirez Delivers Testimony on Key FTC Antitrust Enforcement Efforts

Practical Law Legal Update 9-549-3525 (Approx. 4 pages)

FTC Commissioner Ramirez Delivers Testimony on Key FTC Antitrust Enforcement Efforts

by Practical Law Antitrust
Published on 18 Nov 2013 • USA (National/Federal)
FTC Chairwoman Ramirez testified on behalf of the FTC before the US House of Representatives Subcommittee on Regulatory Reform, Commercial and Antitrust Law on the FTC's competition enforcement activities.
On November 15, 2013, FTC Chairwoman Edith Ramirez delivered testimony on behalf of the FTC to the US House of Representatives Subcommittee on Regulatory Reform, Commercial and Antitrust Law on current FTC antitrust enforcement activity. Chairwoman Ramirez tailored her remarks on three markets:
  • Health care.
  • Technology.
  • Energy.

Health Care

The FTC has recently focused its enforcement efforts on health care market competition to provide consumers with cost-effective, high-quality health care. The FTC has specifically examined:
  • Health care provider mergers.
  • Pay-for-delay agreements.

Health Care Provider Mergers

Chairwoman Ramirez testified that the FTC has filed merger enforcement actions in three particular health care markets:
  • Hospitals.
  • Other health care providers, such as physician groups.
  • Pharmaceutical manufacturers.
Chairwoman Ramirez explained that mergers in those markets are problematic as they may lead to higher health care costs with few related quality of care improvements. However, Chairwoman Ramirez stated that health care provider consolidations have been allowed where evidence shows that a transaction will:
  • Reduce costs.
  • Improve the quality of care.
  • Result in net benefits for the consumer.
The FTC is also continually reviewing mergers between pharmaceutical manufacturers to ensure that the prices for necessary medications remain consumer-friendly.

Pay-for-delay and Other Anticompetitive Agreements

Chairwoman Ramirez noted that ending pay-for-delay agreements has been a top priority for the FTC over the past decade. Chairwoman Ramirez highlighted the recent US Supreme Court decision in FTC v. Actavis as a significant victory because it accomplished an FTC priority of overturning the scope-of-patent test. The FTC will continue to pursue its two current pay-for-delay cases (Actavis and FTC v. Cephalon) and other open pay-for-delay investigations.
In addition to pay-for-delay agreements, Commissioner Ramirez listed two other pharmaceutical company strategies that are attracting antitrust scrutiny:
  • Risk Evaluation and Mitigation Strategies, which prevent generic manufacturers from obtaining brand product samples for bioequivalence testing.
  • Product hopping, which involves slightly altering brand name products to allow a brand to maintain its patent over the newest formulation of the drug.
The FTC hopes that its continued oversight of health care markets will ensure that health care costs stay low by preserving health care competition.

Technology

The FTC's antitrust enforcement in technology markets focuses on issues regarding:
  • Innovation.
  • Standard setting.
  • Patents.
Chairwoman Ramirez noted that the FTC is particularly concerned with patent hold-up, which occurs when a holder of a standard essential patent (SEP) refuses to license the SEP to its competitors or charges exorbitant and unfair SEP licensing fees. The negative effects of patent hold-up include:
  • Increased prices.
  • Diminished incentives to innovate.
  • Undermining the standard-setting process.
The FTC has and will continue to pursue enforcement actions in connection with patent hold-up and other standard setting activity.
Chairwoman Ramirez briefly mentioned that the FTC is aware of the controversy regarding Patent Assertion Entities (PAE) and their effect on competition, and noted that the FTC is considering a study to gather information on PAE activity to form an educated opinion on the matter.

Energy

Finally, Chairwoman Ramirez discussed antitrust enforcement of energy market mergers. Commissioner Ramirez stated that the FTC is aware of the importance of maintaining affordable energy prices, particularly the price of gasoline. To that end, Commissioner Ramirez explained that the FTC is continually monitoring wholesale and retail gasoline and diesel fuel prices to identify potentially anticompetitive conduct.
Commissioner Ramirez concluded her testimony by underscoring the importance of domestic and international antitrust authority cooperation. Commissioner Ramirez pointed to the recent Memorandums of Understanding between US antitrust authorities and China and India (separately), and other collaborations with the European Commission and Japan Fair Trade Commission as evidence of successful partnerships. On the domestic side, Commissioner Ramirez highlighted the recent joint model waiver of confidentiality the FTC issued with the DOJ, which will streamline US antitrust enforcement.