Public Comment Period on Pharmaceutical Mergers Opens and Exposes Dueling Philosophies Among FTC Commissioners
The Multilateral Pharmaceutical Merger Task Force, a working group formed by the Federal Trade Commission (“FTC”), the Antitrust Division of the Department of Justice, State Attorneys General, and counterpart enforcement agencies in Europe and the UK, recently opened a comment period soliciting public input regarding how pharmaceutical mergers should be analyzed, including new potential theories of harm, market definition, and appropriate remedies. The comment period lasts until June 25, 2021.
In making the announcement, Acting Chair Rebecca Slaughter expressed her view that “[i]n the face of skyrocketing drug prices and ongoing concerns about anticompetitive conduct by pharmaceutical companies, we need to ensure that our investigations fully capture the potential impact on prices, quality, access, drug supply chain resilience, capital market investment, and innovation for new drugs.” Commissioner Rohit Chopra went a step further by chastising the Staff and the FTC’s track record, explaining that “[d]espite a wide range of concerns about anticompetitive abuses, the Federal Trade Commission has primarily pursued a pro-merger policy when it comes to the pharmaceutical industry.” Commissioner Chopra went on to state that “this pro-merger approach is not sensible, given the FTC’s mandate and the crises we face when it comes to drug prices.”
On the other hand, Commissioners Noah Phillips and Christine Wilson (the remaining Republican Commissioners) jointly praised the “ongoing efforts to assess competitive concerns that pharmaceutical mergers may raise.” However, and in contrast to the views expressed by their colleagues at the FTC, they reiterated that “[t]o stop a merger, the government must articulate a viable theory of harm to competition that explains why that merger violates the law, and must proffer evidence to support that theory. Merely asserting a general opposition to large pharmaceutical mergers, however heartfelt, does not suffice.”
Strategic planning at the C-suite level should take into account the haze created by this failure on the part of the FTC Commissioners to see eye to eye on merger enforcement policy.