DOJ Signals Increasing Scrutiny of Vertically Integrated Healthcare Companies

On May 19, 2026, Nicole Sarrine, Deputy Assistant Attorney General (DAAG) for Civil Conduct in the U.S. Department of Justice (DOJ) Antitrust Division, signaled increasing suspicion of vertically integrated companies in the healthcare sector in remarks delivered at the Transparency Rising 2026 National Forum.¹

These remarks are notable for several reasons: First, they confirm that the Trump administration views antitrust enforcement as a means of confronting rising healthcare costs. To that end, the administration recently brought civil antitrust actions against large hospital systems in central Ohio² and New York City³ alleging that contract provisions restricting the use of budget-conscious healthcare plans increase the cost of healthcare by “effectively quashing these budget-conscious health plans.”⁴ Similarly, outside the antitrust context, the Trump administration has taken several actions targeting healthcare costs, especially with regard to prescription drugs.⁵

The key point is that the healthcare sector is likely to continue to be “a top priority” of antitrust enforcement in the second Trump administration as affordability issues become increasingly prominent in public and political discourse.⁶

Second, DAAG Sarrine’s remarks align with a reviving debate over vertical integration. In fact, the remarks single out vertical integration as a major driver of healthcare costs: “Although vertical integration has potential benefits in certain contexts, it also creates risks to consumers in healthcare given the multiplicity of decisionmakers, distorted incentives, high market concentration, [] lack of transparency,” and “conflicts of interest” that arise “when a company gains leverage in the healthcare system.”⁷

Judgments about whether vertical integration threatens competition and consumers has shifted considerably over the decades. In the mid-20th century, antitrust enforcers believed that vertically integrated firms would weaponize their integration against competing firms by depriving them of production inputs and/or access to markets.⁸ By the end of the century, however, economists generally dismissed these concerns, arguing that the procompetitive effects of integration ultimately benefited consumers absent some ability by the vertically integrated entity to abuse market power. Today, skepticism of vertical integration from enforcers is back.

In the healthcare context, critics argue that vertical integration creates “conflicts of interest when a company gains leverage in the healthcare system” and that these conflicts encourage a company to favorably deal with its sister companies at the expense of competitors, ultimately driving up costs for consumers.⁹ However, these criticisms ignore benefits of the model, which can include better health outcomes due to increased coordination of care, savings from lower operating costs, and more of an ability to deliver value-based care — all of which ultimately benefit of consumers.

DAAG Sarrine’s remarks serve as a reminder that companies should be aware that DOJ has taken an active interest in exploring theories of harm produced by vertical integration in the healthcare sector and has outwardly voiced criticism of vertical integration as a business model. Because vertical integration among healthcare providers, healthcare insurers, and pharmacy benefit managers (PBMs) is a common feature of the healthcare industry, companies may need to educate DOJ regarding procompetitive effects and efficiencies arising from the vertically integrated business model to counter perceptions such as those expressed by DAAG Sarrine.

In any event, the important takeaway is that DOJ appears to continue to have an appetite to investigate vertical integration fact patterns regardless of whether such investigations are likely to yield actionable civil or criminal cases.

Third, the remarks confirm that DOJ remains skeptical of PBMs — a skepticism shared by the Federal Trade Commission (FTC), Congress, some state Attorneys General, and other industry participants.

Indeed, back in September 2024, the FTC brought an enforcement action against the three largest PBMs alleging that they raised the price that consumers pay for such drugs as insulin through a system that prioritized rebates to drug manufacturers.¹⁰ Similarly, Congress, as part of the Consolidated Appropriations Act of 2026, enacted significant reforms targeting PBMs, including mandating greater transparency and heightening federal oversight.¹¹ At the state level, 39 state Attorneys General recently called for Congress to “reform PBM practicers to curtail their ability to unreasonably raise the price of drugs and to require greater transparency.”¹² Sustained lobbying efforts by key industry groups are likely to result in further inquiries from lawmakers.¹³ For its part, DOJ, according to DAAG Sarrine’s remarks, is concerned that “vertical integration poses risks such as the possibility that PBMs may preference their affiliated companies and attempt to exclude rivals.”¹⁴

Vertically integrated PBMs should thus be prepared to manage continuing antitrust probes and scrutiny from federal agencies, Congress, and states’ Attorneys General as well as proactively ensure their compliance with state and federal law in an increasingly hostile regulatory environment.

---

1 Nicole Sarrine, Dep. Ass’t Att’y Gen., Remarks at the Transparency Rising 2026 National Forum (May 19, 2025) [hereinafter, Sarrine Remarks], https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-nicole-sarrine-delivers-remarks-transparency-rising.
2 Press Release, Dep’t Justice, Justice Department Sues OhioHealth for Anticompetitive Healthcare Contracts That Increase Costs for Ohio Patients (Feb. 20, 2026), https://www.justice.gov/opa/pr/justice-department-sues-ohiohealth-anticompetitive-healthcare-contracts-increase-costs-ohio.
3 Press Release, Dep’t Justice, Justice Department Sues New York–Presbyterian Hospital for Anticompetitive Contracts That Increase Healthcare Costs for New Yorkers (Mar. 26, 2026), https://www.justice.gov/opa/pr/justice-department-sues-new-york-presbyterian-hospital-anticompetitive-contracts-increase.
4 Sarrine Remarks.
5 E.g., Exec. Order No. 14273 (Apr. 15, 2025), https://www.govinfo.gov/content/pkg/DCPD-202500483/pdf/DCPD-202500483.pdf; Exec. Order No. 14297 (May 12, 2025), https://www.govinfo.gov/content/pkg/DCPD-202500591/pdf/DCPD-202500591.pdf.
6 Sarrine Remarks.
7 Id.
8 See, e.g., Brown Shoe Co, Inc. v. United States, 370 U.S. 295, 334 (1962).
9 Sarrine Remarks.
10 Press Release, Fed. Trade Comm’n, FTC Sues Prescription Drug Middlemen for Artificially Inflating Insulin Drug Prices (Sept. 20, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices.
11 See Congress Passes Significant Federal Pharmacy Benefit Manager Reform Impacting Pharmaceutical Market Access (Feb. 18, 2026), https://www.sidley.com/en/insights/newsupdates/2026/02/congress-passes-significant-federal-pharmacy-benefit-manager-reform-impacting-pharmaceutical-market.
12 Nat’l Assoc. Att’ys Gen., Support for Reforming Pharmacy Benefit Managers (Feb. 20, 2024), http://naag.org/wp-content/uploads/2024/02/PBM-Letter-_NAAG-Letterhead-Final.pdf.
13 E.g., Middlemen and Pharmacy Benefit Managers (last visited May 26, 2026), https://phrma.org/policy-issues/pbms-middlemen.
14 Id.; see, e.g., Press Release, Fed. Trade Comm’n, FTC Releases Second Interim Staff Report on Prescription Drug Middlemen (Jan. 14, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-releases-second-interim-staff-report-prescription-drug-middlemen.