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FTC Probes Major Dialysis Providers Over Alleged Anti-Competitive Practices

By  |  July 14, 2024

The Federal Trade Commission (FTC) has launched an investigation into the nation’s two largest dialysis providers, DaVita and Fresenius Medical Care, over allegations that they have engaged in practices designed to stifle competition from smaller rivals. This probe, confirmed by three individuals with knowledge of the situation, centers on the companies’ use of noncompete agreements that may hinder physicians from leaving their clinics to join competitors or start new ventures.

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    According to Politico, the investigation is particularly focused on whether these noncompete agreements obstruct efforts by rival companies to facilitate home dialysis treatment for patients. The probe, which began earlier this year, is still in its preliminary stages and scrutinizes the business models of DaVita and Fresenius, which collectively control over 70 percent of the U.S. outpatient dialysis market. Despite their low public profiles, the clinics of these companies are widespread, found in suburban shopping malls, urban centers, and rural areas across the country.

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    This investigation is part of a broader strategy by the FTC, under the Biden administration, to tackle corporate concentration and enhance competition across various sectors of the economy. The agency, in conjunction with the Justice Department, has been active in investigating and challenging anti-competitive practices and mergers. Recent FTC actions include probes into Amazon’s pricing strategies, allegations of monopolization against a large anesthesiologist group in Texas, and challenges to mergers in the grocery and mattress markets. Additionally, the FTC is expected to file lawsuits against three healthcare companies over rising insulin costs.

    DaVita spokesperson Karen Modlin stated, “We are cooperating with the commission staff to answer their questions and demonstrate the advantages of our structure in serving the kidney care community. We are confident the analysis will show that we have enhanced competition and that our practices promote valuable investments for the betterment of physicians, clinic staff, and patients.” Spokespeople for the FTC and Fresenius declined to comment on the ongoing investigation.

    The noncompete agreements under scrutiny involve nephrologists, specialists in treating kidney disease. Over half a million Americans rely on dialysis treatments, which are essential for removing waste from the blood when kidneys fail to function properly. Fresenius, apart from its extensive network of dialysis clinics, is the leading supplier of dialysis machines used in various settings, including home treatments, and also provides machines to DaVita for home use.