U.S. health care M&A activity will survive the antitrust chill, law firm predicts

The U.S. health care deal market should continue to be strong, in spite of economic challenges, geopolitical concerns and federal regulators’ concerns that health care deals are driving up prices.

A team of lawyers at Seyfarth Shaw gives that assessment in the firm’s new guide to U.S. health care sector mergers and acquisitions.

Most of the guide deals with bread-and-butter M&A considerations, such as how a client might start, finance or buy a health care company.

The Federal Trade Commission, the U.S. Justice Department antitrust division and the U.S. Department of Health and Human recently put out a request for information on consolidation in health care markets.

“The impact of the RFI could be significant,” the Seyfarth team says. “Acquisitions in health care that result in horizontal or vertical consolidation may begin receiving additional scrutiny from applicable federal agencies.”

Members of Congress, federal regulators and state policymakers have also been looking hard at private equity investors’ involvement in health care deals.

Related: California could curb private equity health deals

In spite of those challenges, in the United States, “the health care M&A sector remains attractive owing to inelastic demand and stable third-party payer systems. Investors continue to seek opportunities in this resilient industry, anticipating further transformative deals and technological advancements.”

Companies’ search for growth opportunities should lead to an increase in M&A activity, the team predicts.

If the Seyfarth team is correct, a strong health care M&A market could mean that health care companies will still have chances to cash out and to buy market share.

For employers and benefits brokers, health care player consolidation could force the buyers to look harder for new entrants and small players that can compete with the giants.