The market for apps designed to improve health and wellness or even to diagnose and treat medical conditions continues to grow. Last week, the U.S. Food and Drug Administration (“FDA”) approved a new smartphone-based “carbon monoxide breath sensor system” that measures carbon monoxide levels on a user’s breath. The sensor, which is intended to help users quit smoking, tracks the real time effects of a user’s smoking behavior. And just a few weeks ago, the FDA gave its approval to a cognitive behavioral therapy app to be used in outpatient therapy for substance use disorders related to alcohol, cocaine, marijuana and stimulants. Continue Reading Building a Health App? Part 4: Avoiding an FTC Enforcement Action
Last week, Apple announced the new Apple Watch Series 3 which will feature an enhanced heart rate app. The app will notify you when it detects an elevated heart rate even when you are not working out. The sensor will also be able to analyze cardiac arrhythmia. According to one estimate, 165,000 health-related apps were available for Apple or Android smartphones last year. Forecasts predict that such apps will be downloaded 1.7 billion times by 2017. Without a doubt, health apps are turning into a big business presenting not only an opportunity for financial success but the potential to impact the health and wellness of millions of consumers. The success of a health app will depend on careful consideration of some key legal issues during the early stages of development. In a series of weekly blog posts, we will cover these issues and provide best practices to help guide you through the successful launch of your health app. Below is a preview of what this series will cover. Continue Reading Building a Health App? What You Need to Know
The Federal Trade Commission (“FTC”) and the State of Illinois successfully concluded their challenge to the proposed merger of Advocate Health Care and NorthShore University Health System earlier this month, when the U.S. District Court for the Northern District of Illinois granted the plaintiffs’ request for a preliminary injunction enjoining the health systems from consummating their proposed merger. The parties subsequently abandoned the transaction without appealing the district court’s decision.
The district court had previously denied the motion for a preliminary injunction. It believed that the geographic market proposed by the plaintiffs was too narrow and found the evidence “equivocal” regarding the importance of patients having access to hospitals close to their homes. As such, it held that the plaintiffs had not met their burden of proving a relevant geographic market and thus, did not demonstrate a likelihood of success on the merits. However, in October 2016, the U.S. Court of Appeals for the Seventh Circuit reversed and remanded for further proceedings on the issue of geographic market definition, holding that the lower court erred in its factual findings regarding critical aspects of the geographic market, as well as the remaining preliminary injunction elements that the district court did reach in its first decision.
This alert examines the court’s decision, which not only supports the FTC’s hospital merger enforcement program but continues to up the ante for merging parties attempting to persuade a court that the proposed efficiencies are sufficient to offset alleged anticompetitive effects.
Last week, our antitrust colleagues Bruce Sokler, Robert Kidwell, and Farrah Short, published a Health Care Antitrust Alert on the recent settlement with the Federal Trade Commission by a Puerto Rican ophthalmologist cooperative on charges that the cooperative orchestrated an illegal boycott of a health plan.
As noted in the alert, the case represents the risks of concerted action among competitors, even when that concerted action is facilitated by an otherwise lawful trade association or membership organization.
Earlier this week my colleagues, Bruce Sokler and Farrah Short published an alert detailing the FTC‘s creative solution to permit a presumptively anticompetitive merger for a financially failing medical practice. The FTC entered into a proposed settlement with two Minnesota health care providers, allowing them to proceed with a planned merger that, according to the agency, combines “the two largest providers of adult primary care, pediatric, and OB/GYN services in the St. Cloud area.” The FTC’s willingness to accept the proposed settlement permitting was premised on (1) the fact that one of the medical groups “is a financially failing physician practice” and (2) “concerns regarding disruptions to patient care and possible physician shortages.”
The full alert on the FTC’s envelope-pressing consent solution can be found here.
On Friday, Robert Kidwell and Bruce Sokler, members of the Firm’s Antitrust and Federal Regulatory practice group, presented a webinar on the Third Circuit’s hotly anticipated decision on the FTC’s appeal of the District Court’s denial of its request for a preliminary injunction on the merger of Penn State Hershey Medical Center and Pinnacle Health System.
This case became a topic of interest after the U.S. District Court for the Middle District of Pennsylvania denied the FTC’s request for a preliminary injunction in May 2016. In reaching its decision, the District Court defined the “relevant geographic market” in a manner that, if upheld on appeal, would have essentially gutted the FTC’s approach to hospital merger enforcement. Ultimately, the Third Circuit found that the District Court committed legal error in failing to properly formulate and apply the “hypothetical monopolist test” and issued an opinion that Rob and Bruce characterized as a “big win” for the FTC.
Rob and Bruce also expect this decision to be helpful to the FTC in its ongoing challenge to the Advocate/North Shore merger in Chicago (check out our previous blog post on this topic by clicking here). Stay tuned for further updates!
Join us this Friday at 1:30 pm EDT for a webinar with two of our Antitrust colleagues, Robert Kidwell and Bruce Sokler. They will discuss recent events in the Hershey Hospital merger and their impact on FTC’s hospital merger enforcement program. Learn more about these recent updates from the comfort of your computer in our one-hour webinar.
Hershey Hospital Merger Blocked
Yesterday, the Third Circuit granted a preliminary injunction preventing the merger between Penn State Hershey Medical Center and Pinnacle Health System. Previously, the district court had denied the FTC’s and State of Pennsylvania’s motion challenging the merger. The district court found that the merger challenge was not meritorious, particularly in light of Affordable Care Act policies. But the FTC’s hospital merger enforcement program was revived with yesterday’s Third Circuit’s decision, which is significant to healthcare lawyers and providers.
During the webinar, Rob and Bruce will review this important decision and the court’s approach to:
- Geographic markets in hospital merger cases
- The central role of the FTC’s hypothetical monopolist test
- Renewed emphasis on the testimony and role of insurers
- Using the efficiency defense in merger litigation
- Relevance of merging parties’ forward-looking contracts with payers
- The capital-avoidance justification for mergers
- The place of the ACA in hospital merger analysis
Possible Impact on Advocate Merger
And because Pennsylvania can’t have all the fun, Rob and Bruce will also discuss how the Hershey decision might impact the FTC’s pending challenge to the Advocate merger in Chicago, which we have blogged about before.
Earlier this week, the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) filed an amicus brief with the Fifth Circuit stating that the Texas Medical Board’s (the “Board”) appeal was inappropriate and the Court does not have jurisdiction over the appeal. But the government did not stop there. The brief goes on to argue that if the Court does in fact find that it has jurisdiction, it should affirm the district court’s order denying the Board’s motion to dismiss and allow the case to proceed. Continue Reading Teladoc Receives Support from the Feds
On Tuesday, June 14, 2016, the U.S. District Court for the Northern District of Illinois declined to temporarily block the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem in the Chicago area, handing the FTC its second hospital merger loss this year. The FTC and the State of Illinois filed an administrative complaint in December 2015, seeking a temporary restraining order and a preliminary injunction to block the transaction. As discussed in our previous blog post, the FTC alleged that the combined entity would operate the majority of the hospitals in the North Shore area of Chicago, and control more than 50% of the general acute care inpatient hospital services. Continue Reading FTC Suffers Another Hospital Merger Loss in Advocate-NorthShore
The Federal Trade Commission (“FTC”) and the state of Pennsylvania have two weeks to persuade the Court of Appeals for the Third Circuit that the pending merger of Penn State Hershey Medical Center (“Hershey”) and Pinnacle Health System (“Pinnacle”) is anticompetitive. The FTC’s request for a preliminary injunction against the pending merger was denied on Monday by the U.S. District Court for the Middle District of Pennsylvania which found that the deal was likely to benefit patients. FTC v. Penn State Hershey Medical Center, 1:15-cv-02362 (M.D. Penn May 9, 2016). That decision is analyzed here. On Tuesday, the government filed a motion in the district court seeking an injunction enjoining the proposed merger pending an emergency appeal to the Third Circuit.
Pursuant to a December stipulated temporary restraining order (“TRO”), the hospitals are entitled to consummate the merger within three business days following a ruling denying the preliminary injunction. Thus, under that TRO, the merger could have closed today. In their opposition to the FTC’s motion for an injunction pending appeal, the hospitals indicated that they would not oppose a two week extension of the TRO if the government filed for an injunction with the Third Circuit. The FTC filed its emergency appeal and the district court granted the two week extension, setting the new TRO expiration date to May 27. The hospitals’ response to the emergency motion is due Wednesday May 18th. Continue Reading FTC Granted 2-Week Reprieve in Effort to Block Pennsylvania Hospital Merger