All together now? Evolving antitrust approaches to bundled discounting.
Many sellers in the United States offer bundled discounts, or package deals. Consumers generally welcome the ability to get more for less in return for purchasing multiple goods or services together. In the healthcare industry, payors and providers commonly negotiate such arrangements. Although bundled discounts often create a win-win for buyers and sellers, they can be anticompetitive when used by a monopolist to exclude a smaller competitor. In recent years, several antitrust lawsuits have addressed the legality of particular bundled discount arrangements. Two federal circuit courts of appeal have established divergent, and somewhat elusive, standards for evaluating the arrangements under the antitrust laws--and the law likely will remain in a state of flux until the Supreme Court steps in to hear the issue. This article explains the underlying economic rationale for antitrust concerns with bundled discounts, and surveys various standards that courts have applied to such arrangements as well as proposed standards that have not yet been adopted. It also discusses the practical implications of these standards for sophisticated healthcare entities that may seek to bundle a range of products or services. The article concludes with a checklist of questions that sellers should ask in conducting a preliminary evaluation of potential antitrust risk associated with a particular discount arrangement.
White
Christine L
CL
Office of Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, USA. cwhite@crowell.com
Good
Heather
H
D016363:Antitrust Laws; D004465:Economic Competition; D005249:Fees and Charges / Q000331:legislation & jurisprudence*; D017754:Group Purchasing; D006801:Humans; D014481:United States