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Consumer Advocates and Unions Challenge Novo Holdings’ $16.5 Billion Deal for Catalent

By  |  October 20, 2024

U.S. consumer advocacy organizations and two prominent labor unions have made a significant push for the Federal Trade Commission (FTC) to block Novo Holdings’ proposed $16.5 billion acquisition of Catalent, citing concerns about the potential impact on competition in the pharmaceutical market, particularly regarding weight loss drugs and advanced gene therapies. According to a letter sent to the FTC on Thursday, the U.S. Public Interest Research Group and the Service Employees International Union (SEIU) highlighted how this deal could limit market options for competing companies.

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    The acquisition, which Novo Holdings claims will enhance the supply of Wegovy—its highly successful GLP-1 injectable weight loss treatment—has raised alarms among these organizations. They argue that the deal poses a significant threat to competitors like Amgen, Pfizer, Roche, and AstraZeneca, all of which are reportedly working on their own GLP-1 drugs. “Because of the proposed acquisition, there is a real question of whether these future rivals to Novo will be able to secure the expertise to bring the product to market and have available and qualified capacity to manufacture these products when they commercially launch,” the groups stated in their letter to the FTC.

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    Read more: Pressure Mounts on FTC to Investigate Pharmacy Benefit Managers’ Co-Manufacturing Agreements

    Adding to the scrutiny, U.S. Senator Elizabeth Warren, a Democrat, recently called on the FTC to conduct a thorough investigation of the acquisition due to similar concerns regarding market competition. This heightened scrutiny comes at a time when companies like Viking Therapeutics, Structure Therapeutics, and Sun Pharma are also developing GLP-1 drugs, potentially affected by the deal.

    In a response to the consumer groups’ letter, Novo Holdings expressed confidence in the acquisition, stating, “We remain confident in the pro-competitive rationale for this transaction and are committed to realizing the benefits it will bring to customers, patients, and the local communities which Catalent now serves,” as reported by Reuters.

    As the FTC considers the implications of this high-stakes deal, the future of competition in the pharmaceutical industry remains uncertain, with various stakeholders weighing in on the potential consequences for innovation and consumer choice in the evolving landscape of weight loss and gene therapy treatments.

    Source: Reuters