Healthcare M&A Insights
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Legislative and M&A Regulatory Updates
Strategies for Healthcare M&A Success in a More Regulated Environment: Commentary
The healthcare industry is witnessing a significant shift in its mergers and acquisitions (M&A) landscape. Regulatory changes and heightened scrutiny are impacting how healthcare organizations approach consolidation. Here’s a breakdown of key trends shaping healthcare M&A in 2024:
Focus on Drug Pricing
Bipartisan efforts target Pharmacy Benefit Managers (PBMs) to address rising prescription drug costs. Expect stricter transparency requirements and limitations on spread pricing practices.
Antitrust Investigations
The Department of Justice (DOJ) is investigating United Health Group and Optum’s recent acquisitions, raising concerns about potential competition issues. This could impact future deals, including United’s planned merger with Amedisys.
State-Level Scrutiny Intensifies
States like California (SB 184) are implementing stricter regulations requiring prior notification for healthcare M&A, mirroring existing federal requirements under the Hart-Scott-Rodino (HSR) Act.
Navigating the New Regulatory Landscape
These changes present challenges but also opportunities for strategic healthcare M&A. Here are some key considerations:
Early Legal and Regulatory Guidance
Early consultation with legal and regulatory advisors is important for navigating the complexities of the new M&A environment.
Transparency as a Cornerstone
Clearly demonstrate the value proposition of your M&A for patients and the overall healthcare market to address potential concerns.
Exploring Alternative Strategies
Consider partnerships or joint ventures that may face less regulatory scrutiny to achieve your strategic goals.
The Road Ahead: Potential for Future Shifts
The upcoming 2024 elections could bring changes to the federal regulatory environment. Staying informed and adapting your M&A strategy based on those potential shifts will be imperative for success.
For more information or questions, please contact the Healthcare Services team:
Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.
Brad Erhart, Director: berhart@
Daren Oddenino, Director: [email protected]