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The Honorable Cynthia M. Maleski
Dear Commissioner Maleski: This letter follows up on my November 30, 1993, letter in which we advised you of the Antitrust Division's plan to commence a civil investigation to obtain additional information necessary to assess the competitive effects of IBC's Prudent-Buyer policy and to determine whether it violates the federal antitrust laws. The investigation was opened in December. We have now had the opportunity to analyze carefully information and arguments relevant to whether the Prudent-Buyer policy is exempt from scrutiny under the federal antitrust laws by virtue of the so-called state-action doctrine, as explained, for example, in F.T.C. v. Ticor Title Ins. Co., 112 S.Ct. 2169 (1992). We have concluded that a court would likely rule that the Prudent-Buyer
policy is exempt from federal antitrust scrutiny and have consequently
decided to close our investigation. We would like to emphasize that,
in reaching this decision, we did not reach any judgment about whether
the Prudent-Buyer policy, on balance, reduces or raises health-care
costs in southeastern Pennsylvania. We currently have insufficient information
to make such a judgment and, in view of our conclusion about the likely
applicability of the state-action doctrine to the Prudent-Buyer policy,
would likely encounter legal objections by IBC if we sought to compel
production of the information. We should add, however, that your staff
was very helpful to us in providing information relevant to our assessment
of the state-action issue. Should anyone in your Department have any question about our decision
or interest in consulting with us, please have them telephone me at
(202)307-0997.
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