Medtech POV Blog

FTC’s Non-Compete Agreement Rulemaking Puts Medtech Innovation and Patient Access to New Treatments at Risk

  1. Christopher L. White General Counsel & Chief Policy Officer

On January 19, 2023, the Federal Trade Commission (FTC) – a bipartisan federal agency whose actions I’m always following – published a proposed rule in the Federal Register that would, among other things, prohibit employers from imposing non-compete agreements on their employees.  Although not specific to medtech companies, the FTC’s proposed rule could have unintended, negative consequences for the medtech industry and the patients we serve, including impeding medtech innovation and reducing competition, resulting in diminished quality and increased cost of the healthcare available to patients.

Given the stakes for the medtech industry and patients, AdvaMed and its members swiftly prepared and submitted formal comments to the proposed rule on March 16, 2023.  Some of the key takeaways from AdvaMed’s comment submission include:

My AdvaMed legal colleague, Ida Nassar, recently convened a broad and diverse group of medtech innovators, lawyers, and executives to develop AdvaMed’s recommendations and comments to the FTC, described above. 

In conclusion, the FTC’s proposed rule to ban reasonable, appropriately used non-compete agreements eliminates the only reliable mechanism for medtech innovators – the same ones that stood on the front lines of the fight against COVID-19 – to protect their confidential business information and investments in innovation and talent, such that they can continue bringing lifesaving technologies to patients as quickly and effectively as possible.  I hope that the final rule will take a more nuanced approach to regulating non-compete agreements and recognize that certain confidential business information needs to be protected.  Anything less jeopardizes patient health, innovation, and competition.

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