Pharma mergers: FTC and DOJ to explore new ways of enforcing antitrust laws
Just when the pharma industry thought today’s $3 billion GSK buyout might kick off M&A season, the Department of Justice and the Federal Trade Commission said later in the afternoon they’re putting on a 2-day workshop in two weeks that will focus on “new approaches to enforcing the antitrust laws in the pharmaceutical industry.”
The virtual workshop will include a keynote from FTC commissioner Rebecca Kelly Slaughter, who has previously sought to block key pharma mergers and recently pulled together international partners from Canada, the UK and the EU, to identify concrete and actionable steps to review and update their analyses of pharma mergers. This workshop is the culmination of the work of this group of regulators, known collectively as the Multilateral Pharmaceutical Merger Task Force, the FTC said.
It remains unclear the extent to which the FTC will do more than what it’s done historically: review mergers between pharma companies and identify certain product overlaps while requiring divestitures in some cases.
But Slaughter previously noted in her dissent against the Bristol Myers Squibb and Celgene merger in 2019, “The Commission has not recently litigated pharmaceutical merger cases, and, although merger litigation in other industries and merger guidelines provide useful guidance, we simply do not have a contemporary body of pharmaceutical merger case law to clarify the boundaries for our analytical approach.”
That may be at least part of the reason she’s pulled together the international group and sought to focus her efforts on instances where mergers might curtail pharma R&D spending.
“It is essential to scrutinize closely whether a merger is likely to diminish innovation competition by incentivizing the merged firm to curtail its innovative efforts, including investment in research and development, below the level that would prevail in the absence of the merger,” Slaughter wrote in her opposition to the AbbVie/Allergan merger in 2020.
The FTC-DOJ workshop on June 14-15 will look to establish some of those boundaries, as sessions on the first day of the workshop will focus on market concentration in the pharma sector and merger remedies, while the second day will feature sessions on the “innovation aspects” of pharma mergers and how conduct by pharma companies affects merger analyses.