With 30% of the OECD's GDP projected to be spent on healthcare by 2030, numerous Member States attempt to market-test healthcare by tying demand and supply to fixed-price, prospective contracts. Hence, the 2003–4 Bush Administration's Medicare bill offered $500 bn prescription drug benefits to motivate pensioners to join for-profit health maintenance plans that manage costs by substituting closed budgets for fee-for-service arrangements. The same year, German healthcare reforms proposed sickness funds to pool chronically ill patients in specialized disease management programs, replacing itemized reimbursement by global budgets. Finally, the reforms of the UK National Health Service (NHS), intended to improve the system's overall capacity to respond to patient needs, employed fixed-price performance contracts to stimulate competition in primary and hospital care. In each case, determining cost-effective therapies as a condition for coverage amounts to “managing care” and continues to raise concerns about the legitimacy and constestability of results and standards. Governance concerns related to treatment guidelines, patient rights and the legal status of various stakeholders are covered elsewhere. This chapter deals with market reactions to regulatory changes and vice versa.

Following a brief introduction to healthcare systems and the convergence towards “managed care”, section 1 focuses on the most recent developments in the UK NHS and the transformation of US managed care towards what President Bush in his 2006 State of the Union address called consumer-driven healthcare. Section 2 discusses US antitrust rationales for curbing specialty hospitals and upholding apparently anti-competitive settlements between generic and branded drug producers.