Fed. Trade Comm’n v. Penn State Hershey Med. Ctr.

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Penn State Hershey Medical Center is a leading academic medical center, with 551 beds and more than 800 physicians. Hershey offers all levels of care, but specializes in more complex, specialized services, unavailable at most other hospitals. Hershey draws patients from a broad area. PinnacleHealth System has three hospital campuses, two in Harrisburg, and another in Mechanicsburg, focusing on cost-effective primary and secondary services, with only a limited range of more complex services. It employs fewer than 300 physicians and provides 646 beds. In 2014, Hershey and Pinnacle signed a letter of intent for a proposed merger. Their respective boards subsequently approved the merger; the Hospitals notified the Federal Trade Commission (FTC), and, in 2015, executed a “Strategic Affiliation Agreement.” The FTC opposed the merger and filed suit under the Clayton Act and the FTC Act. The district court denied a preliminary injunction pending the FTC’s adjudication on the merits, finding that the opponents of the merger did not properly define the relevant geographic market, a necessary prerequisite to determining whether a proposed combination is sufficiently likely to be anticompetitive as to warrant injunctive relief. The Third Circuit reversed after determining the government’s likelihood of success and weighing the equities, finding that a preliminary injunction would be in the public interest. The Hospitals did not rebut the government’s prima facie case that the merger is likely to be anticompetitive. View "Fed. Trade Comm'n v. Penn State Hershey Med. Ctr." on Justia Law