‘Hipster Antitrust’ Might End the Megamerger Party

By Joe Nocera, Bloomberg

A few months ago, a group of Democratic senators, several of them presidential candidates and all members of the Senate’s antitrust subcommittee, wrote a letter to Joseph Simons, the Republican chairman of the Federal Trade Commission, to criticize two monster pharma deals under regulatory review: the $63 billion Allergan PLC-AbbVie Inc. merger, and Bristol-Myers Squibb Co.’s $74 billion purchase of Celgene Corp.

Consolidation in the pharmaceutical industry, the senators wrote,

is occurring against a backdrop of ever-rising prescription drug spending….It is more important than ever that the FTC take appropriate action to protect consumers. The Federal Trade Commission must carefully consider whether the proposed transactions may lessen competition, stifle innovation, or harm consumers.

“The proposed AbbVie/Allergan and Bristol-Myers Squibb/Celgene transactions,” they added, “raise significant antitrust issues.”

The FTC has not yet ruled on the Allergan-AbbVie deal, which was only announced in June, and which the companies hope to complete in early 2020.

But on Friday, Simons and the two other Republican commissioners on the five-member FTC brushed aside the concerns of the Democrats and approved the Bristol-Myers Squibb deal with Celgene. Its only condition was that Celgene sell Otezla, its blockbuster psoriasis drug, apparently because Bristol-Myers Squibb has a promising psoriasis drug of its own in a phase 3 trial. The FTC has historically frowned on merged drug companies keeping overlapping drugs, fearing excessive market control.

The FTC’s two Democratic commissioners, Rohit Chopra and Rebecca Kelly Slaughter, dissented, something Chopra in particular has made a habit of doing since he joined the FTC in 2018. During the Obama administration, Chopra was the student loan ombudsman at the Consumer Financial Protection Bureau, where he attempted to spur competition in student lending. At the FTC, he quickly gained a reputation for being in the vanguard of what’s sometimes called “hipster antitrust” — the effort to infuse new thinking into the antitrust arena.

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