GOP Victory Set To Boost Private-Sector Health Moves

Vertical integration and other expansion activities by companies within the US health care sector are likely to proceed untrammelled by strict oversight for at least two years, under the newly Republcan-dominated US Congress, industry observers believe.

Congress "is likely to have neither the time nor inclination to second-guess acquisitions across traditional boundaries in the health care field," comments the Pink Sheet, adding that "the Justice Department and the Federal trade Commission will have significantly less leeway to undertake a more active role with an unfriendly Congress looking over their shoulders." Ironically, the Republican-led Congress may, through the industry mergers, acquisitions and restructuring which are likely to flourish under its aegis, produce some of the significant health care changes which were pledged by the Democrats in 1992.

While government agencies have until relatively recently avoided interfering in the expansion plans of health care companies, this had been starting to change, with for example the FTC investigations of Merck & Co and SmithKline Beecham's acquisitions of pharmacy benefit management companies (see story alongside). Now, however, with the pro-business party controlling both Houses, the trend towards increasing oversight is almost certain to be reversed, which may mean that some companies which had been discouraged by the political climate from implementing attempts to move into PBM and other areas may well resurrect these plans.