Tue 03/16/2021 12:45 PM
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Relevant Documents:
FTC Press Release
EC Press Release
Canada Competition Bureau Press Release
UK CMA Press Release

Takeaways

  • Antitrust enforcers in the United States, Canada, the European Union and the United Kingdom announced today, Tuesday, March 16, the formation of a working group to update their approach to analyzing the effects of pharmaceutical mergers.

  • Current Democratic FTC commissioners have generally pursued an aggressive enforcement posture in assessing pharmaceutical mergers. Chairwoman Rebecca Slaughter and Commissioner Rohit Chopra dissented from decisions allowing large transactions to proceed conditioned on divestitures, including Allergan/Abbvie, Celgene/Bristol-Myers Squibb, Pfizer’s UpJohn spinoff to Mylan, and Danaher’s acquisition of GE Biopharma.

  • Slaughter did not give a specific timeline for the working group to issue recommendations but noted that FTC staff might use the working group’s findings on a rolling basis.


Antitrust enforcers in the United States, Canada, the European Union and the United Kingdom announced today, Tuesday, March 16, the formation of a working group to update their approach to analyzing the effects of pharmaceutical mergers. The group, initiated by the FTC, will also include the DOJ’s Antitrust Division and state attorneys general along with the Canadian Competition Bureau, the European Commission Directorate General for Competition and the U.K.’s Competition and Markets Authority. For access to the linked documents throughout this story as well as our M&A team's analysis and reporting on hundreds of other mergers and acquisitions request a trial here.

The goal of the initiative is to have concrete and actionable steps to update analysis of pharma mergers, the FTC stated. Acting FTC Chairwoman Rebecca Slaughter said that the project will welcome input from additional enforcers around the world, academics and policy professionals. She did not give a specific timeline for the working group to issue recommendations, but noted that FTC staff are “eager to put ideas into practice” and might use the working group’s findings on a rolling basis.

Slaughter said that “[g]iven the high volume of pharmaceutical mergers in recent years, amid skyrocketing drug prices and ongoing concerns about anticompetitive conduct in the industry, it is imperative that we rethink our approach toward pharmaceutical merger review.”

The working group will consider questions related to: (1) how current theories of harm could be expanded and refreshed; (2) the range of a pharmaceutical merger’s effects on innovation; (3) how conduct such as price fixing, reverse payments and other regulatory abuses be considered; (4) the evidence needed to challenge a transaction based on new or expanded theories of harm; (5) the types of remedies that would work in cases to which such theories are applied; and (6) lessons learned about the scope of assets and characteristics of firms that make successful divestiture buyers.

Current Democratic FTC commissioners have generally pursued an aggressive enforcement posture in assessing pharmaceutical mergers. While a significant number of FTC votes are unanimous, during their time at the commission both Commissioners Rohit Chopra and Slaughter dissented from decisions allowing large transactions to proceed conditioned on divestitures, including Allergan/Abbvie, Pfizer’s UpJohn spinoff to Mylan, Celgene/Bristol-Myers Squibb, and Danaher’s acquisition of GE Biopharma. Slaughter, dissenting in Allergan/Abbvie, expressed concerns “about the proposed divestitures and the absence of meaningful benefits to consumers.” She added, “In light of AbbVie’s public representations about its plans to curtail Allergan’s ongoing research programs, I cannot share the majority’s confidence that the innovation effects of this merger are competitively benign.”

Current pharmaceutical deals under review by enforcement agencies include Alexion/AstraZeneca, GW Pharmaceuticals/Jazz Pharmaceuticals, Pandion Therapeutics/Merck, PRA Health Sciences/Icon, and Five Prime Therapeutics/Amgen.
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