40 Annals of Health Law Vol. 25
market, 38 and higher prices for consumers through price increases. 39 Perhaps the timeliest of these cited negative impacts is that of inflated drug pricing. Media outlets such as the New York Times, the Wall Street Journal, and the Huffington Post have relentlessly targeted a number of bio-pharma companies for pricing activity in late 2015.40 While the FDA is responsible for review and approval of new drugs and biologics, the agency does not have a role in the eventual price of the commercial products once on the market. 41 Likewise, the Department of Health and Human Services assesses coverage for federal reimbursement purposes, though the agency has no control over the prices themselves. 42 And the FTC and the Department of Justice (DOJ) are tasked with policing anticompetitive behavior through review of mergers and acquisitions, yet neither agency specifically examines current pricing regimes as part of the legal analysis of pending consolidations. 43 The next section examines the FTC’s role in consolidation assessments. The contemporary touchstone of bad industry behavior in this realm is uncontrovertibly Turing Pharmaceutical’s (now former) CEO, Martin Shkreli. Following the August 2015 acquisition of the five decades-old
38. Rob Stein, Shortages of Key Drugs Endanger Patients, WASH. POST (May 1, 2011), https://www.washingtonpost.com/national/shortages-of-key-drugs-endanger- patients/2011/04/26/ AF1aJJVF_story.html?hpid=z5 (“Consolidation in the pharmaceutical industry has left only a few manufacturers for many older, less profitable products, meaning that when raw material runs short, equipment breaks down or government regulators crack down, the snags can quickly spiral into shortages.”). 39. Aimee Picchi, 5 Reasons Generic Drugs Cost So Much, CBS NEWS (Aug. 20, 2015 5:41AM), http://www.cbsnews.com/news/5-reasons-why-generic-drugs-cost- so-much/ (“Consumers end up paying more because consolidation means less competition among generic drug makers, allowing prices to rise.”). 40. Andrew Pollack, Drug Goes from $13.50 a Tablet to $750, Overnight, N. Y. TIMES (Sept. 20, 2015), http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase- in-a-drugs-price-raises-protests.html; Jonathan D. Rockoff, Valeant Probe Reprises Federal Focus on Drug Pricing, WALL STREET J. (Oct. 15, 2015, 7: 35 PM), http://www.wsj.com/articles/valeant-probe-reprises-federal-focus-on-drug-pricing- 1444952138; Anna Almendrala, What The Daraprim Price Hike Actually Does To Health Care, HUFFINGTON POST (Sept. 23, 2015, 10: 38 AM), http://www.huffingtonpost.com/entry/daraprim- price-turing-shkreli_us_560063cee4b0 0310edf82060. 41. How Drugs are Developed and Approved, U.S. FOOD & DRUG ADMIN. (Aug. 18, 2015), http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDeveloped andApproved/. 42. Amy Goldstein, Sharp Increases in Drug Costs Draw Hundreds to Government Forum, WASH. POST (Nov. 20, 2015), https://www.washingtonpost.com/news/to-your-health/ wp/2015/11/20/sharp-increases-in-drug-costs-draw-hundreds-to-government-forum/ (“HHS has written to pharmaceutical companies, asking them to provide more information about their pricing and ideas on how to encourage prices that promote access.”). 43. FED. TRADE COMM’N & U.S. DEP’T OF JUSTICE, ANTITRUST GUIDELINES FOR COLLABORATIONS AMONG COMPETITORS 2 (2000), https://www.ftc.gov/sites/default/ files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration- among-competitors/ftcdojguidelines- 2.pdf.