FTC Chair Lina Khan ’17 Speaks about Competition Policy in Health Care

As competition policy becomes more essential to the future of American health care, the Federal Trade Commission (FTC) has ramped up its efforts to protect consumers and competition in health care markets. 

During a Sept. 16 event hosted by the Solomon Center and moderated by Abbe R. Gluck ’00, Alfred M. Rankin Professor of Law and founding Faculty Director of the Solomon Center, FTC Chair Lina Khan ’17 discussed the FTC’s recent pathbreaking work in health care, with commentary from Martin R. Flug Visiting Professor of Law Eric A. Posner, a leading expert in antitrust law. The event took place before a capacity crowd of students in Yale Law School’s Levinson Auditorium, a testament to the interest in Khan and the FTC’s work.

Among other topics, Khan discussed the FTC’s efforts to ban noncompete agreements, increase competition in pharmaceutical markets, and protect competition in health care services. Khan emphasized the intersection between the health care and technology industries, including concerns over data privacy and security.

Khan began by addressing the importance of health care competition and the potential for unchecked market power wielded by platform-like intermediaries to create conflicts of interest, as in the tech industry. Khan explained that the FTC enforces laws to protect consumers from fraudulent practices and ensure data security, with a particular focus on privacy concerns. The FTC has actively prosecuted privacy breaches cases, including those involving health care data. Khan noted that the lack of a national privacy law has left gaps in consumer data protection — especially sensitive health care data from commonly used mobile apps. Khan stressed the FTC’s role in ensuring that companies handling health data do not exploit it for advertising or sale without consumer consent.

Khan also discussed the FTC’s proposed ban on noncompete clauses in employer contracts, which was issued in April 2024 but remains blocked following a federal court order. Khan described the process that led to the ban, including the FTC’s empirical research that noncompete clauses harm labor markets by limiting health care providers’ employment opportunities, which raises health care costs. Khan mentioned that of the over 26,000 public comments that the FTC received on the proposed rule, approximately 25,000 were in favor of it. Khan said that many comments came from health care workers, who described the challenges caused by noncompete clauses, particularly in rural areas where noncompetes threaten to cause shortages of health care providers.

Khan also addressed the growing role of private equity in health care. She expressed concern about how private equity firms’ strategies, such as selling off hospital buildings or other assets, could negatively impact health care quality and access. She pointed to empirical research suggesting that private equity ownership of nursing homes, for example, has led to declines in care quality. The FTC is also paying closer attention to “serial acquisition strategies” in health care, in which private equity firms make smaller, less noticeable acquisitions that cumulatively impact the health care industry despite each individual acquisition falling below reporting thresholds.

The discussion also covered pharmaceutical patents, with Khan describing companies’ use of patent strategies to delay the entry of generic competitors into the market, keeping drug prices high. The FTC has focused on challenging these practices. The FTC has devoted particular attention to companies’ attempts to extend patent protections for minor changes to drugs, a tactic that can prevent cheaper alternatives from becoming available. Khan also discussed the FTC’s efforts to crack down on abuses of patent listing in the Orange Book, a system through which companies can delay FDA approval of generic drugs.

Throughout the event, Khan emphasized the interdisciplinary nature of the FTC’s work, explaining that competition policy affects many aspects of daily life, from health care services to the cost of everyday goods. 

In response to a question from Posner about why the FTC’s work has earned bipartisan support, Khan noted a growing recognition that private power, and not just state power, can substantially burden liberty and impair access to goods and services. That recognition, Khan suggested, has made the FTC’s work resonate with policymakers and ordinary Americans across the political spectrum. 

Khan and Gluck concluded the panel by discussing the range of tools that the FTC has used to further its mission and the role of Khan’s tenure in foregrounding the FTC’s work on behalf of consumers and workers in addition to businesses.