Five pharmaceutical industry giants—AbbVie, Amgen, Gilead, Merck, and Novartis—have joined forces with 26 other leading companies to create the “Partnership for the U.S. Life Science Ecosystem” (PULSE). The newly formed coalition aims to challenge and oppose a proposed overhaul of federal antitrust guidelines while advocating for mergers and acquisitions that promote innovation within the sector, reported Bloomberg.
In a statement released on Wednesday, PULSE expressed deep concern over the Federal Trade Commission’s (FTC) recent shift in antitrust enforcement strategy, which they believe “runs counter to long-standing precedent that has guided pro-innovation M&A for decades.”
The coalition further cautioned that if the proposed changes to merger and acquisition (M&A) review and enforcement proceed, they could undermine the dynamic ecosystem responsible for numerous groundbreaking medical treatments.
The Department of Justice (DOJ) and the FTC unveiled their draft merger guidelines in July 2023, marking a significant departure from their traditional approach to examining mergers, particularly within the pharmaceutical industry. Among the 13 principles proposed for reviewing mergers, a key tenet emphasizes that mergers should not substantially increase market concentration in already saturated markets.
Previously, the FTC’s antitrust enforcers primarily focused on assessing direct competition. However, the updated guidelines now consider how companies utilize their negotiating power, taking into account broader factors influencing the industry landscape.
During the summer, the DOJ and FTC also introduced proposals for changes to the premerger notification and review process, as well as adjustments to the requisite documentation that companies must provide. These proposed modifications could potentially extend the deal-review timeline by two to three months. Nevertheless, the agencies argue that these new filing rules will enable more effective and efficient screening of transactions for potential antitrust concerns.
One of the founding members of PULSE, Amgen, found itself in the crosshairs of the FTC in May 2023 when the agency sought to halt the company’s acquisition of Horizon Therapeutics. Despite the initial legal battle, an agreement was eventually reached, permitting the $27.8 billion acquisition to proceed in September, reported Reuters.
Biotech executive Andrew Pannu, with an extensive background in investment banking, private equity, and corporate development, shared his insights with Biospace last month, suggesting that the case against Amgen signals the Biden administration’s increased scrutiny of the pharmaceutical industry’s rebating practices.
The FTC’s primary concern in this case was that Amgen might exert pressure on pharmacy benefit managers to favor Horizon treatments by offering rebates on its own drugs that could complement Horizon’s offerings.
Source: News Bloomberg Law