FTC warns of ‘rampant’ pharma consolidation as it targets $28bn Amgen deal

US regulators have warned that “rampant consolidation” within the prescribed drugs trade is pushing up costs for sufferers because the Federal Commerce Fee sued to dam Amgen’s $28.3bn deal to amass Horizon Therapeutics.

The lawsuit marks the primary time in additional than a decade that the US antitrust regulator has sought to dam a deal within the pharmaceutical sector. Shares in Horizon, which is predicated in Eire, had been down practically 16 per cent on Tuesday morning in New York.

The lawsuit additionally hit Seagen, which slid greater than 5 per cent as traders weighed the potential of the FTC focusing on different offers within the sector. The oncology-focused biotech agreed a $43bn deal to be acquired by Pfizer.

“Rampant consolidation within the pharmaceutical trade has given highly effective corporations a move to exorbitantly hike prescription drug costs,” mentioned Holly Vedova, director of the FTC’s competitors bureau.

Amgen mentioned it was “dissatisfied by the FTC’s resolution and stays dedicated to finishing this acquisition”. It mentioned it had addressed questions raised by the regulator and proved that the transaction “poses no professional aggressive points”.

Amgen and Horizon indicated they might attempt to full the deal by combating the FTC in court docket. “We firmly imagine in the advantages of this acquisition and intend to work with the court docket on a schedule that may permit the transaction to shut by mid-December,” each corporations mentioned in separate statements.

FTC chair Lina Khan is amongst a brand new cohort of progressive antitrust officers appointed by US president Joe Biden, who’ve vowed to undertake a harder stance and crack down on anti-competitive conduct within the US.

When asserting the transaction final yr, Amgen had mentioned that Horizon’s pipeline of medicines would “strongly complement” its R&D portfolio. The pipeline contains medication focusing on uncommon inflammatory and autoimmune ailments in addition to Horizon’s blockbuster therapy for thyroid eye illness, Tepezza.

“We perceive the FTC and present administration is ready to proceed its extra aggressive technique to discourage M&A even when authorized deserves will not be robust as Amgen doesn’t have any overlap or anti-competitive dynamics with Horizon,” mentioned Michael Yee, analyst at Jefferies.

The FTC underneath Khan and the Division of Justice’s antitrust unit underneath Jonathan Kanter have aggressively challenged offers they deem to be anti-competitive.

One of many largest checks for Khan would be the FTC’s bid to dam Microsoft’s $75bn acquisition of gaming firm Activision Blizzard. The deal was cleared by the EU this week, although the UK has determined to dam the transaction.

The antitrust watchdog underneath Khan has additionally heightened its scrutiny of the pharmaceutical trade past company tie-ups. The company launched an inquiry final June into intermediaries within the prescription drug trade. It required the six largest pharmacy profit managers, which negotiate charges and rebates with drug producers, to share info on their enterprise practices.

Lower than 10 days later, the FTC mentioned it will intensify enforcement towards illicit rebate plans or bribes to prescription drug intermediaries that block customers’ entry to low-cost medication.

Upon asserting the FTC’s harder enforcement stance, Khan warned that this “ought to put your complete prescription drug trade on discover: once we see unlawful rebate practices that foreclose competitors and lift prescription drug prices for households, we received’t hesitate to deliver our full authorities to bear”.

Extra reporting by Peter Wells in New York

Back To Top