Written by: Sumeet Singh | Chief Executive Officer
The FTC is taking names and grabbing headlines this fall, as they have unveiled sweeping litigation to take on behemoths in technology and healthcare. Companies including Google, Amazon, and even U.S. Anesthesia Partners, a private equity anesthesiology provider roll-up, have all been subject to lawsuits targeting various anti-trust activities in which they allegedly participate.
Recent FTC Actions
What constitutes antitrust is a highly debated construct. The lawsuits above have a wide range of focus. On one spectrum you have ‘traditional’ antitrust activities, such as U.S. Anesthesia Partners allegedly rolling up a majority of service providers in the state of Texas, systematically raising pricing by relying on inelastic demand and controlling supply — and then allegedly cutting deals with competitors to protect the control of supply. On the other side you have their digital equivalents, such as Google allegedly controlling search engine distribution by paying billions to be a default search engine and Amazon allegedly controlling pricing by punishing vendors that undercut marketplace pricing. The government and small businesses generally contend that big businesses that profit mightily from anti-trust practices, and startups and independent businesses that seek to disrupt, compete ethically and reduce costs, are iced out.
Past National Attention on Pharma
The past decade has held an incredible amount of scrutiny on the pharma, pharma services and the pharmacy industries. This has resulted in an explosion of regulation including the passing of the price-fixing DSCSA, State Price Transparency Reporting state legislation, Inflation Reduction Act, opioid lawsuits, opioid taxes, drug takeback programs, and much more. So, how will the Antitrust fervor affect our industries?
A Look at the Past: An Early Battle for the Serialization Solution Leader
Tracelink sued the Healthcare Distribution Alliance (HDA) alleging antitrust violations in 2017 when the HDA introduced HDA Origin, a product specifically designed to compete with Tracelink. Tracelink specifically accused HDA of creating artificial barriers to entry by developing proprietary and inaccessible data that would essentially freeze out all other competitors. Specifically, the focus of the lawsuit was that “Origin is based on a closed proprietary platform that excludes market competition” from accessing Supply Chain Master Data through “sweeping, restrictive, non-compete clauses as a condition to access and use the Origin database. For example, the HDA User Agreement and Contributor Agreement for Origin contain restrictions that prevent licensees from providing track and trace product data from Origin’s GTIN database to third-parties – even though HDA creates none of the data in the Origin database. Contributors create virtually all the data and merely deposit that data in Origin.” [from TRACELINK, INC. vs. HEALTHCARE DISTRIBUTION ALLIANCE].
As a result, HDA’s actions would result in higher costs and limited market access for competitors. The lawsuit aims to address these alleged practices, promote fair competition, and protect consumer interests.
A Look at the Past: Generic Drug Price-Fixing
Teva and a host of other generic drug companies were accused of price-fixing generic drugs in August 2020. Teva ultimately settled for $225M in August 2023 under a Deferred Prosecution Agreement.
A Look at the Future: What is to Come?
It is foreseeable that past practices and activities should not be a barometer for success in the future. There are multiple antitrust “schemes” that have not yet garnered attention including bundling.
NOTE:
Huge thank you to Dirk Rogers and the RxTrace blog (now operated by Track Trace Rx) for the write-up. Please find the original here: https://www.rxtrace.com/2017/11/tracelink-v-hda-lawsuit-teaches-us-value-supply-chain-master-data.html/
