Healthcare Business News

Leibowitz stepping down as FTC chairman

By Joe Carlson
Posted: February 1, 2013 - 3:30 pm ET

Federal Trade Commission Chairman Jon Leibowitz is stepping down from his role as one of the top antitrust watchdogs in Washington, but observers say a change in leadership is unlikely to remove healthcare as a top priority at the agency.

“Healthcare has been a priority here for many years,” said FTC Competition Bureau Director Richard Feinstein. “I think it's appropriate that it is, it affects everybody. And I would think it will remain a priority.”

Leibowitz will step down Feb. 15. He has served as one of five commissioners on the FTC since 2004, and has been chairman of the agency since March 2009. Under his chairmanship, the board took legal action to stop hospital mergers in Georgia, Illinois, Ohio and Pennsylvania and filed the first-ever charges to protest a physician-practice acquisitions in Nevada.

The commission has also waged a high-profile battle against brand-name drug manufacturers who pay potential competitors not to release generic equivalent drugs to the market. In all of those cases, the commission said consumers would see higher healthcare prices because of reduced competition—an issue that the Obama administration has made an enforcement priority.

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“It's consistent with the president's desire to focus on healthcare and try to contain, to the extent possible, the growth in healthcare expenditures for both the government and private payers,” said McDermott Will & Emery antitrust attorney David Marx, who represented several hospital in deals challenged by the FTC. “Healthcare costs are a big piece of the economy, both in the public and private sector.”

The FTC under Leibowitz successfully derailed a merger of Rockford Health System and OSF Health System in northern Illinois, as well as the acquisition of the physician-owned Surgical Institute of Reading (Pa.) by Reading Health System.

The commission also filed its first-ever charge in a physician-acquisition deal against Renown Health of Reno, Nev., which agreed to allow up to 10 cardiologist out of noncompete agreements in order to restore local competition after Renown acquired two large heart-care groups in the market.

But the FTC did not win all of its healthcare cases under Leibowitz.

Two cases pending before the U.S. Supreme Court in its current term, FTC v. Phoebe Putney Health System (PDF) and FTC v. Watson Pharmaceuticals, both stem from FTC losses at the trial and circuit courts.

A ruling in the Phoebe case could come any day, while arguments in Watson are scheduled for March. In both cases, FTC officials are hoping the Supreme Court will overturn the lower courts.

“It is certainly true that in the courts we haven't found as much success as we would have hoped,” Feinstein said regarding the issue of pay-for-delay. “We would hope that the Supreme Court, which is the ultimate arbiter of success in the judicial system, might solve that problem.”

Marx said the commission's march to the high court under Leibowitz despite lower-court losses was telling. “That several of the cases under his tenure have worked their way to the Supreme Court is a testament to his determination on these issues, even when the FTC wasn't initially successful,” Marx said.

A news release on Leibowitz's departure from the commission did not list his future plans. An attorney, he has worked in private practice and represented the Motion Picture Association of America and has held jobs as counsel to Senate committees on terrorism, antitrust and competition.

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