The Justice Department’s Antitrust Division recently announced a $100 million settlement with Florida Cancer Specialists & Research Institute (“FCS”) for an illegal conspiracy to allocate cancer patients in Southwest Florida.  FCS conspired with various competitors to allocate medical and radiation oncology treatments. The $100 million criminal penalty is the statutory maximum under Section 1 of the Sherman Act.

FCS also reached a settlement with Florida State prosecutors and agreed to pay $20 million to settle antitrust and false claims act claims. 

FCS is one of the largest hematology and oncology practices in Florida, which maintains around 100 offices and more than 200 doctors across the state.

DOJ’s announcement kicks off a major criminal investigation into illegal antitrust activity in the oncology industry.  DOJ touted the settlement as evidence that its criminal antitrust enforcement program is vibrant.  Since the slowdown of the large auto car supply investigation, DOJ’s criminal antitrust program has been slow. 

Indeed, some practitioners have questioned whether DOJ’s program is as effective as it has been in the past.  Some have raised questions whether the leniency program’s benefits are as significant an incentive to self-report illegal antitrust activity given the possible global exposure to multiple antitrust enforcement programs maintained by other countries.

Returning to this new prosecution, DOJ’s investigation could have far-reaching implications for domestic cancer treatment centers. 

As explained in the DPA, DOJ considered the following relevant factors: (1) a criminal conviction would have significant impact on FCS’ business and result in mandatory exclusion under Medicare and Medicaid; (2) FCS began to cooperate in October 2018 in this investigation; and (3) FCS provided substantial assistance in an ongoing investigation.

FCS is based in Fort Meyers, Florida.  According to the one-count information filed in federal court, FCS participated in a criminal antitrust conspiracy with competitors in Collier, Lee and Charlotte Counties, in Southwest Florida.  Beginning in 1999 and continuing for the next 17 years, FCS entered into an illegal agreement to allocate chemotherapy treatments to FCS and radiation treatments to a competitor.  As a result of this conspiracy, FCS faced minimal competition in Southwest Florida and limited valuable integrated care options and choices for cancer patients. 

FCS agreed to pay $100 million and to cooperate with the ongoing criminal investigation.  FCS agreed to maintain and effective compliance program to prevent and etect criminal antitrust violations.

As part of its DPA, FCS agreed to waive any non-compete provisions that FCS may enforce with its current or former oncologists or other employees who open or join a competing oncology practice in Southwest Florida.