Mr. Chairman, we need to ensure that the Justice Department and Federal Trade Commission are being aggressive in their enforcement of the antitrust laws. An article in the January 8, 2007 Legal Times about the Antitrust Division’s weak merger enforcement record seriously troubled me. I’m hoping that the witnesses today will rebut the allegation that our federal antitrust enforcement agencies are not up to snuff in challenging problematic deals, or going after anti-competitive business practices.
It’s critical that companies compete in a fair manner, so that consumers can enjoy more choice, as well as lower prices for goods and services. Vigorous enforcement of the antitrust laws will help create and maintain an open, fair and competitive marketplace, and that’s good not just for the American consumer, but for the American economy. We also need to ensure that the Justice Department and the Federal Trade Commission have the necessary resources and expertise to do a good job.
Unfortunately, I won’t be able to attend this hearing for an extended period of time because of prior commitments. So I’ll be submitting a number of written questions to our witnesses today. But I do want to make a couple of points right now.
First, I’m concerned about the state of American agriculture – there’s just too much concentration in the industry. I’m concerned about reduced market opportunities, possible anti-competitive and predatory business practices, vertical integration and fewer competitors. For example, in the pork industry, expanded packer ownership of hogs, exclusive contracting and captive supply are adversely impacting the ability of small independent producers and family farmers to compete in the marketplace. Late last year, I wrote a letter to the Antitrust Division expressing my serious reservations about the proposed Smithfield Foods and Premium Standard Farms merger.
Because of my concerns about agribusiness consolidation, I’m particularly interested in how the Antitrust Division and the Federal Trade Commission review agriculture mergers. The antitrust laws are supposed to protect consumers, but they’re also supposed to keep the market fair and open for all market competitors.
A while back, in 2003, the Senate Judiciary Committee held a hearing on monopsony in agriculture, and looked at the buying power of processors in our nation’s agricultural markets. Well, I think that this Committee needs to do more in it’s oversight efforts with respect to whether the Justice Department and the Federal Trade Commission are really paying attention to monopsony in agriculture, and looking at the right things when they review agriculture mergers that implicate these kinds of concerns. Assistant Attorney General Pate, back in 2003, agreed with some of us on the Committee that agricultural markets can be very different from other markets. Although Mr. Pate indicated that that the Justice Department does look at vertical concerns in specific mergers, I’m not convinced that the Antitrust Division is considering all the anti-competitive effects of monopsony and bargaining power. We should seriously consider whether the Antitrust Division should issue guidelines specific to agriculture, as it has done for the health care industry, or whether it should issue general monopsony guidelines. I hope that the Chairman of the Committee, as well as the Chairman of the Antitrust Committee, will work with me to craft legislation to deal with the unique antitrust concerns facing agriculture today.
In addition, I wanted to complement Commissioner Majoras on the Federal Trade Commission’s efforts in ensuring that drug companies, both name brand and generic, play by the rules and don’t stiff the American consumer. As you know, I want to make sure that cheaper drugs get to the market as soon as possible. I’d particularly like to compliment the Commission’s pro-active efforts in pursuing reverse payments – those patent settlements where the name brand company pays off a generic company so that it’ll hold off introducing a lower priced drug in the market, keeping drug prices high for Americans and hurting our bottom line. I’m working with the Federal Trade Commission’s staff, as well as Senator Kohl, Chairman Leahy and others here on the Judiciary Committee to refine the legislation that recently approved by the Committee to put a stop to these anti-competitive deals. And I’m hopeful that we’ll be able to get something passed soon.
On another matter, some time ago – that is almost 2 years ago – I joined Chairman Leahy and Senator Rockefeller in a letter asking the Commission to study “authorized generics” and determine the competitive effects of this practice. “Authorized generics” are generic drugs introduced by the name brand company at the same time the first independent generic drug company enters the market during the 180 day exclusivity period. I urge the Federal Trade Commission to complete this study quickly so we can move forward on this issue.
Again, Mr. Chairman, I appreciate the opportunity to make this statement, and look forward to the testimony today.