Antitrust Implications of Alternative Delivery Systems

Collaborative arrangements between clinical labs have created new opportunities for market development and the efficient delivery and production of services. As with any joint effort between otherwise competing entities, however, these arrangements are subject to federal and, some cases, state antitrust laws designed to ensure that the market performs in the most efficient way possible, a result believed best achieved through the preservation of competition. As a result, both the formation and operation of the new arrangement will be analyzed to ensure that its anticompetitive effects, if any, are minimal and are outweighed by the arrangement's procompetitive efficiencies. At the formation stage, the new entity will be analyzed to determine whether the participants would be able to exercise market power, which, in antitrust jargon, means the ability to raise prices above the competitive level. At the operational stage, the new entity will be analyzed to determine whether agreements among participants, primarily agreements on price, are necessary for the efficient operation of the new enterprise. This article addresses these basic antitrust principles.