Pharma in the crosshairs: How the FTC is expanding its antitrust powers under its new chair
Less than a month since her Senate confirmation, the new, young and staunchly progressive Federal Trade Commission chair Lina Khan is ready to up the pressure on unfair business practices, including at the largest pharma companies. To do that, Khan is rolling back restrictions on antitrust investigations and potentially opening the flood gates on Big Pharma M&A.
On Thursday, Khan led a vote to approve a series of resolutions that direct agency staff to ramp up its investigations, via subpoenas or otherwise, around seven specific enforcement priorities, including pharma companies, PBMs, and hospitals. While the commission has historically required its antitrust staff to obtain the full commission’s approval to begin such investigations, the FTC will now be able to open investigations or issue subpoenas with only one commissioner’s approval, and that includes investigations into pharma companies.
“These targeted resolutions would streamline investigations that fall within these subject areas, enabling more expeditious investigatory process. This is particularly important given that we are in the midst of a massive merger boom,” Khan said in remarks at one of the first public meetings for FTC’s commissioners in decades. The FTC in March set up an international working group to more closely evaluate pharma company mergers in light of concerns around drug pricing and anticompetitive behavior.
Khan also led the withdrawal of a prior statement from the FTC from 2015, which she said will recommit the commission to its mandate to police unfair methods of competition even if they are outside the ambit of two antitrust laws, known as the Sherman or Clayton Acts. The FTC’s two Republicans opposed all of the measures passed on Thursday, and Khan’s positioning shows how the FTC will be a more partisan agency than in the past. Amazon has already sought to recuse Khan from antitrust investigations because of her past comments on the online retail giant.
One of the three Democratic commissioners, Rohit Chopra, is still awaiting Senate confirmation to head the Consumer Financial Protection Bureau thanks to a Biden nomination, but his departure and the FTC’s even partisan split that’s coming (before Biden nominates another FTC commissioner) will not hamper any investigations that Democrats want to open as a change made Thursday will mean Republican commissioners won’t be able to block such investigations.
And while Khan, just 32 years old, pushes ahead with the strengthening of FTC’s ability to go after bad actors, including with a rulemaking fix on Thursday, a recent Supreme Court decision hamstrung the commission’s ability to secure billions of dollars in relief for consumers in a wide variety of cases, leaving the door open for biopharma companies to quickly end certain cases involving anticompetitive practices.
“While rulemaking is no substitute for a permanent fix to our Section 13(b) authority to obtain monetary relief, trade rules can help ensure that businesses will no longer be able to take advantage of consumers and cement their market position by engaging in practices that do people real harm until we catch them and take them to court the first time,” Democratic commissioner Rebecca Kelly Slaughter wrote in a related statement.