Biden FTC’s Antitrust Bark Proves Worse Than Its Bite

livemint.com:

A weak party can get a much stronger opponent to back down, game theory explains, by signaling it is willing to take extreme actions and bear steep costs. But that sort of brinkmanship arguably works only if you don’t have to actually fight—and lose—repeatedly. Federal Trade Commission Chair Lina Khan has been open about her willingness to take on hard cases and lose.

“I’m certainly not someone who thinks success is marked by a 100% court record," Khan has said. Frequent defeats, including last week’s settlement with Amgen, are weakening the agency’s hand, though. For much of the Biden administration’s first three years in office, the FTC’s more aggressive stance arguably served as a deterrent in the healthcare space, at least when it came to large deals.

While it is impossible to prove that more mergers and acquisitions would have happened under a different regulator, industry leaders have clearly been reluctant to do big ones and have basically ruled out megadeals. Bristol Myers’ acquisition of Celgene for $74 billion in 2019, for instance, arguably wouldn’t have been contemplated during the Biden administration. That deterrent hasn’t gone away entirely, but it is weakening in the healthcare space, where the need for external growth is urgent because of expiring drug patents and a law allowing Medicare to negotiate some drug prices.