By Jody Coultas, J.D.
The FTC has dismissed its case challenging Sanford Health’s proposed acquisition of Mid Dakota Clinic.
Citing an adverse ruling related to its proposed merger, Sanford Health and Mid Dakota Clinic have abandoned the proposed transaction and the FTC has dismissed its case, the FTC announced (In the Matter of Sanford Health, FTC File No. 171 0019).
In December 2017, North Dakota health care providers Sanford Health and Sanford Bismarck and Mid Dakota Clinic, P.C. (MDC) were temporarily enjoined from consummating their proposed merger, pending an FTC administrative trial. The FTC challenged the combination on the ground that the deal would purportedly create the largest group of physicians offering adult primary care physician (PCP) services, pediatric services, obstetrics and gynecology (OB/GYN) services, and general surgery physician service in the market. According to the FTC, the proposed transaction threatened substantial harm to competition in four relevant service markets: (1) adult PCP services; (2) pediatric services; (3) OB/GYN services; and (4) general surgery physician services. Sanford and MDC are the two largest providers of each of the relevant services in the Bismarck-Mandan area. If the companies merge, then Sanford will have the following market shares in the Bismarck-Mandan region: 99.8% of general surgeon services, 98.6% of pediatric services, 85.7% of adult PCP services, and 84.6% of OB/GYN physician services.
The district court granted the preliminary injunction after determining that the plaintiffs were likely to succeed in proving that the acquisition would substantially lessen competition in the four types of physician services in the Bismarck-Mandan area. The U.S. Court of Appeals for the Eighth Circuit upheld the injunction.
Following the Eighth Circuit’s ruling, Sanford Health and MDC notified the FTC that they are abandoning their efforts to pursue a proposed merger. In light of that decision, the FTC dismissed its challenge. The FTC noted that the most important elements of the relief sought were accomplished without the need for further administrative litigation, and that the public interest warrants dismissal. The Commission has determined to do so without prejudice, however, because it is not reaching a decision on the merits.
Companies: Sanford Health; Sanford Bismarck; Mid-Dakota Clinic, PC
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