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  • Updated Apr 3, 2020

    A ‘killer acquisition’ merger in 2012 was waved through by the Federal Trade Commission, whose commissioners all went on to represent corporate America at top law firms.

    This week, we learned that America squandered the opportunity to avoid an imminent critical shortage of lifesaving ventilators, and horrifying medical triage, amid surging COVID-19 cases in New York City, New Orleans, and elsewhere. The New York Times reported that a 2012 merger overseen by the Federal Trade Commission (FTC) foiled public-health officials’ push to replenish the nation’s ventilator supply.

    In 2008, a small company named Newport Medical Instruments contracted with the Department of Health and Human Services to produce cheap portable ventilators. Newport was on the cusp of mass production when, amid increasing consolidation in the sector, medical technology giant Covidien acquired Newport for $100 million. Covidien was a significant player in the ventilator market and faced a potential loss of profits should Newport’s cheaper product succeed; so it canceled the contract, depriving the government of a ventilator stockpile. This appears to have been a “killer acquisition,” a deliberate scheme by a large incumbent to eliminate competition.

    Read more; prospect.org/health/men-and-women-who-shrank-the-us-ventilator-supply

    TLDR: Coviden bought Newport and stopped them from making a cheaper ventilator which the government was going to buy to stock up for something like this.

  • Apr 3, 2020
    ¡
    1 reply

    TLDR Capitalism

  • Apr 3, 2020

    A ‘killer acquisition’ merger in 2012 was waved through by the Federal Trade Commission, whose commissioners all went on to represent corporate America at top law firms.

    This week, we learned that America squandered the opportunity to avoid an imminent critical shortage of lifesaving ventilators, and horrifying medical triage, amid surging COVID-19 cases in New York City, New Orleans, and elsewhere. The New York Times reported that a 2012 merger overseen by the Federal Trade Commission (FTC) foiled public-health officials’ push to replenish the nation’s ventilator supply.

    In 2008, a small company named Newport Medical Instruments contracted with the Department of Health and Human Services to produce cheap portable ventilators. Newport was on the cusp of mass production when, amid increasing consolidation in the sector, medical technology giant Covidien acquired Newport for $100 million. Covidien was a significant player in the ventilator market and faced a potential loss of profits should Newport’s cheaper product succeed; so it canceled the contract, depriving the government of a ventilator stockpile. This appears to have been a “killer acquisition,” a deliberate scheme by a large incumbent to eliminate competition.

    The merger approval at the center of this crisis, which seems to have reduced competition dramatically in the ventilator space, received little scrutiny from the Times. The article did not note, for example, that the antitrust enforcement agency charged with approving the merger—the FTC’s Bureau of Competition—allowed Covidien to acquire Newport without even a second request for information, or any divestitures. That means that a purchase of a potential ventilator competitor (which had already agreed to produce emergency stock for the federal government) in a concentrated market did not strike the FTC as remotely problematic.

    The commission actually approved Covidien’s request to consummate the merger before the 30-day waiting period required under the Hart-Scott-Rodino Act finished.

    The Covidien-Newport merger appears to have been a “killer acquisition,” a deliberate scheme by a large incumbent to eliminate competition.

    The FTC’s Republican leadership at the time of the Covidien merger has acted no differently. The late Republican commissioner J. Thomas Rosch came to the FTC from BigLaw firm Latham & Watkins and returned there in a counseling role afterward. Republican commissioner Maureen Ohlhausen joined the FTC in the midst of Covidien’s merger proposal in April 2012. She now leads Baker Botts’s antitrust section. When Baker Botts announced she’d joined the firm, the managing partner made clear her experience would “directly benefit” clients on FTC-related matters. Before becoming commissioner, Ohlhausen revolved out of FTC staff-level positions two other times

    The Covidien-Newport merger reduced competition and exacerbated the shortage of ventilators. The FTC officials we know had ultimate responsibility for this merger appear, through their professional moves, to have never had the private sector far from their heart while purportedly serving the public. Now that shortage has severe repercussions, while the FTC is maintaining its reliance on lawyers who spin between the commission and private law firms. In order to move to a less consolidated economy and avoid more deadly consequences, the enforcement agencies must end the expectation that a stint as a regulator is less a career than a prelude to a lucrative private-sector position promoting corporate consolidation.

    Read more; prospect.org/health/men-and-women-who-shrank-the-us-ventilator-supply

    TLDR: Coviden bought Newport and stopped them from making a cheaper ventilator which the government was going to buy to stock up for something like this.

  • Apr 3, 2020

    whew

  • Scratchin Mamba ⚒️
    Apr 3, 2020
    Castle

    TLDR Capitalism

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