On July 9, President Biden issued an executive order on promoting competition in the American economy that could have significant ramifications for health care systems.
The order indicates that the pace of business consolidation has accelerated and that “in over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did 20 years ago.” This trend is true for health care resulting, in some instances, an overall lack of competition impacting areas like pricing for prescription drugs and hearing aids. And broader, the consolidation trend could affect forthcoming innovation as well as industry economic growth.
In terms of health care, Biden’s executive order establishes a government effort to promote competition within the American economy by lowering prescription drug prices and requiring hearing aids to be sold via over-the-counter at drug stores.
In addition, the executive order calls on antitrust agencies, the Department of Justice and the Federal Trade Commission to “enforce the antitrust laws vigorously” with enforcement focused on health care market sectors. In particular, the agencies have been charged with reviewing and revising their merger guidelines to ensure that patients are not harmed. In addition, the Biden administration supports the existing hospital transparency rules issued by the Trump administration and has directed the U.S. Department of Health and Human Services to finish implementing legislation to address surprise hospital billing.
Changes are coming for the health care industry that will impact the pace of consolidation, pricing and current and future growth strategy. Executives should become familiar with the mandates by reviewing the executive order fact sheet and following RSM for regular updates.