The Federal Trade Commission (FTC) has elected not to appeal a Dec. 8, 2020, decision of Judge Gerald Pappert of the U.S. District Court for the Eastern District of Pennsylvania dismissing the FTC’s attempt to stop Faegre Drinker client Thomas Jefferson University’s acquisition of the Albert Einstein Healthcare Network. This is the first FTC antitrust action to be defeated in the health care space in nearly two decades.
This result was the last regulatory hurdle and will allow the merger to move forward. It also breaks an FTC winning streak of successfully challenging hospital and provider mergers that dates back to 1999.
The FTC’s decision follows Pennsylvania Attorney General Josh Shapiro electing to drop his office’s opposition to Jefferson’s acquisition of Einstein on Jan. 12.
“It is gratifying to see the Federal Trade Commission and Pennsylvania Attorney General abandon efforts to block Thomas Jefferson University’s acquisition of the Einstein Healthcare Network,” said Faegre Drinker litigation partner Ken Vorrasi, who led the trial team representing Jefferson. “Our client is very pleased and looks forward to working with Einstein to bring together these two historically linked academic medical centers, whose shared vision is to improve the lives of patients and their communities.”
Philadelphia-based Jefferson and Einstein first announced their merger in 2018. It will add Einstein’s three general acute care hospitals and its inpatient rehab hospital to Jefferson’s health system. The FTC had sued, alleging that it would hurt competition for insurers in certain parts of Philadelphia.
The opinion from Judge Pappert dismissing the compliant said that the FTC failed to show “that there is a credible threat of harm to competition.” The ruling followed six days of hearings in September 2020.
Jefferson’s cross-office Faegre Drinker team was led by Washington, D.C., partners Ken Vorrasi and Lee Roach, Philadelphia partner Paul Saint-Antoine, and Chicago partner Dan Delaney.