March 17, 2021

Congressman Neguse Applauds FTC Working Group To Build a New Approach to Pharmaceutical Mergers

In November 2020, Congressman Neguse called for review of the FTC’s pharmaceutical merger review process to tackle competition concerns

Washington D.C.— Today, Congressman Joe Neguse applauded the Federal Trade Commission’s (FTC’s) announcement to launch a multilateral working group to build a new approach to pharmaceutical mergers. 

In November, as the then Vice-Chair of the House Judiciary Antitrust Subcommittee, Congressman Neguse called for an antitrust hearing to probe federal regulators' approach to pharmaceutical mergers and acquisitions, and to ensure the merger review process was adequately addressing anticompetitive concerns. 

“In the COVID-19 environment, it is critical that there is robust competition within our pharmaceutical market. Soaring prescription drug prices pose a significant challenge to American consumers who are facing economic uncertainty,” said Congressman Joe Neguse. “Given the rising number of pharmaceutical mergers in the last few years, and growing anticompetitive conduct within the industry, this working group will provide an opportunity for federal regulators to update their approach surrounding acquisitions and mergers. It is critical that the House Judiciary Committee support these efforts, including by convening a hearing on the FTC’s approach as I called for last November.” 

The Federal Trade Commission and its counterpart competition enforcement agencies in the U.S. and abroad announced yesterday they will launch a working group to update their approach to analyzing the effects of pharmaceutical mergers. Initiated by the FTC, the working group will include the Canadian Competition Bureau, the European Commission Directorate General for Competition, the U.K.’s Competition and Markets Authority, the U.S. Department of Justice Antitrust Division, and Offices of State Attorneys General.  

This joint project plans to tap expertise from competition authorities with whom the FTC cooperates frequently, as well as others with relevant experience, to ensure the most effective enforcement in these crucial markets. The goal of this initiative is to identify concrete and actionable steps to review and update the analysis of pharmaceutical mergers. This project will ensure that FTC investigations include fresh approaches that fully analyze and address the varied competitive concerns that these mergers and acquisitions raise.  

Among the questions to be considered: 

  • How can current theories of harm be expanded and refreshed?
  • What is the full range of a pharmaceutical merger’s effects on innovation?
  • In merger review, how should we consider pharmaceutical conduct such as price fixing, reverse payments, and other regulatory abuses?
  • What evidence would be needed to challenge a transaction based on any new or expanded theories of harm? 
  • What types of remedies would work in the cases to which those theories are applied?
  • What have we learned about the scope of assets and characteristics of firms that make successful divestiture buyers?