The Federal Trade Commission (FTC) and the U.S. Department Of Justice (DOJ) have escalated their investigation into the impact of private equity deals within the health-care sector. Central to their concerns is the increase in serial acquisitions by businesses, a strategy that has drawn their attention owing to its potential for significant consolidation, despite each individual deal’s scale often being too small to invoke antitrust review.
This development emerges amid the two agencies’ broader scrutiny of private equity transactions, marking an enhancement of federal inquiries into the techniques employed by companies to bypass antitrust review through what is often characterised as “salami-slicing” – executing a series of acquisitions that each fall below the threshold for review, but cumulatively cause significant shifts in market dynamics.
To unearth the full impact of this strategy, both the FTC and DOJ are now soliciting public comments on these serial acquisitions. The feedback is sought from a wide range of stakeholders including businesses, trade organizations, elected officials, consumers, and workers. These comments are expected to provide detailed insights into the effects of such activities on the health-care industry.
This request for public input serves as an indication of the seriousness with which both agencies view this issue. Indeed, regulators are increasingly attentive to the tactics used by serial acquirers and are actively seeking strategies to mitigate these effects. Should the widespread use of these tactics lead to increased consolidation within the health-care or any other sector, the public could experience reduced choices, higher prices, or lowered quality of goods or services – outcomes that antitrust laws are designed to prevent in the first place.
To learn more about this public call for input or to provide your own commentary, please visit this link. Further details about the broader context of this call by the FTC and DOJ can be found in the original Bloomberg Law report.