Criminal Antitrust Charge Against Healthcare Provider: Physician Founder of Florida Oncology Practice Indicted

October 1, 2020
Firm Publication

On September 24, the Antitrust Division of the United States Department of Justice (Division) announced the second criminal antitrust charge from its ongoing investigation into market allocation and other anticompetitive conduct in the oncology treatment industry. The defendant, Dr. William Harwin, is the founder and former president of Florida Cancer Specialists & Research Institute LLC (FCS), the United States’ largest independent medical oncology/hematology practice. This is the first criminal antitrust prosecution of a healthcare provider since the mid-1990s.

The indictment stems from Dr. Harwin’s alleged role in a long-running conspiracy between FCS and a competitor to divvy up oncology markets in three Southwest Florida counties. Specifically, according to the indictment, the conspirators agreed that in those counties FCS would perform all medical oncology treatments (like chemotherapy), while the competitor would perform all radiation oncology treatments. The conspiracy ran from as early as 1999 until at least 2016, before coming to light through a 2017 whistleblower lawsuit.

The indictment alleges that Dr. Harwin established and enforced the conspiracy through conversations and communications with the competitor. For example, in February 2012, after learning the radiation oncology co-conspirator was administering a certain cancer drug to patients, Dr. Harwin allegedly emailed the competitor saying “we expect you will end this.”

Assistant Attorney General for Antitrust Makan Delrahim said in a statement that the charge demonstrates the Division’s commitment to “holding culpable executives accountable for their crimes, especially when they impact vulnerable Americans, such as those in need of life-saving treatments.” He also emphasized that the Division will “continue to work to protect competition and integrity in the healthcare industry.”

Earlier this year, FCS resolved its criminal liability for the conspiracy by entering into a deferred prosecution agreement (DPA). Under the terms of the DPA, FCS agreed to pay a statutory maximum fine of $100 million. FCS also agreed to waive any non-compete agreements with its oncologists and other employees, to implement a corporate antitrust compliance program, and to cooperate fully with the government’s continuing investigation. By entering into a DPA instead of pleading guilty, FCS was able to avert exclusion from federal healthcare programs. FCS also reached a separate settlement with the Florida Attorney General’s Office for another $20 million.

Literally, all violations of the Sherman Act (the United States’ main antitrust law) could be prosecuted as criminal cases. As a matter of prosecutorial discretion, however, the Division has long reserved criminal enforcement for so-called “per se” antitrust violations—that is, cases where the type of conduct at issue (like price-fixing, market allocation, and bid-rigging) is so plainly anticompetitive that liability can be imposed categorically without delving into the pro- and anti-competitive effects of the defendant’s specific conduct. If convicted, Dr. Harwin faces a maximum of 10 years in prison and a $1 million fine. Dr. Harwin has retained counsel and intends to fight the charge.

Criminal antitrust enforcement has historically been rare in the healthcare industry: there were two cases in the 1990s, and there were none in the half-century before that. It remains to be seen whether these prosecutions are merely the product of egregious facts or an early signal of the Division’s recalibrated enforcement priorities. The Division has stated that their investigation in the oncology area is ongoing, and another provider company and four individuals were mentioned, but not named in this indictment. These developments are a vivid reminder of the key role a robust antitrust compliance program should play in guarding against market allocation and other criminal antitrust violations.

For more information on this case or establishing an antitrust compliance program at your company, please contact the authors.