FTC sues over Amgen’s $28-billion Horizon Therapeutics deal
The Federal Trade Commission sued Tuesday to block Amgen’s $27.8-billion deal to buy Horizon Therapeutics, arguing the tie-up would stifle competition for the development of treatments for serious illnesses.
In a sealed complaint filed in federal court in Illinois, the FTC said the acquisition would allow Amgen to entrench Horizon’s monopoly on medications for thyroid eye disease and chronic refractory gout. Horizon shares closed down 14.2% in New York trading, the most since August 2022. Amgen was down 2.4%.
The complaint seeks an injunction barring the deal from closing while the FTC moves forward with an in-house trial on whether the merger violates antitrust law.
“Rampant consolidation in the pharmaceutical industry has given powerful companies a pass to exorbitantly hike prescription drug prices, deny patients access to more affordable generics, and hamstring innovation in life-saving markets,” FTC Competition Bureau Director Holly Vedova said in a statement. “The FTC won’t hesitate to challenge mergers that enable pharmaceutical conglomerates to entrench their monopolies at the expense of consumers and fair competition.”
Amgen said it “remains committed” to completing the Horizon acquisition.
The FTC allegation that the companies might offer a multi-product discount at some point in the future “is entirely speculative and does not reflect the real world competitive dynamics,” Amgen said. “We are unaware of any prior acquisition that has been blocked under a bundling theory.”
Horizon said in a statement that it “does not and has no plans to bundle any of its rare disease medicines.”
Amgen will acquire Horizon Therapeutics, a biopharmaceutical company that focuses on treatments for rare and autoimmune diseases, for about $26.4 billion.
The suit marks the first time the FTC has sued to stop a pharmaceutical deal since 2009. In the past, the agency allowed industry mergers to move forward so long as the companies divested any overlapping treatments. A redacted copy of the complaint was not immediately available.
But the agency under Chair Lina Khan has taken a tougher approach to deals, challenging several major mergers including Microsoft’s proposed acquisition of Activision Blizzard and Intercontinental Exchange’s deal to buy mortgage software rival Black Knight.
A prostate cancer drug developed at UCLA with federal funds costs more than three times as much in the U.S. as anywhere else. President Biden could have forced a price cut but didn’t.
Amgen has 27 approved drugs, including blockbuster treatments such as Enbrel for rheumatoid arthritis and Otezla for psoriasis. Horizon distributes 11 drug products in the U.S. — including Tepezza, used to treat thyroid eye disease, and Krystexxa, for chronic refractory gout — that do not face competition, the FTC said. In 2022, Tepezza brought in $1.97 billion in revenue and Krystexxa $716 million in revenue for Horizon, according to company filings.
Under the Biden administration, healthcare has been a prime focus for the FTC, which examines deals and conduct involving hospitals and physician practices, pharmaceuticals and medical devices. The agency’s antitrust scrutiny has led five hospitals to abandon merger plans over the last two years. The FTC also has been probing pharmaceutical benefit managers such as Cigna Group’s Express Scripts and CVS Health’s Caremark as part of a study into whether the intermediaries lead to higher drug prices.
In 2021, the FTC said it would rethink its approach to pharmaceutical mergers after an explosion of deals. A Bloomberg Law analysis found that the FTC imposed conditions on less than one-third of the 38 pharmaceutical deals valued at $10 billion or more between 2010 and 2021.
“Relatively few leading drugs have been developed within the largest pharmaceutical companies,” Khan said at a workshop last year on pharma deals. “As antitrust enforcers, it’s our job to promote their competition that will help create the right conditions for the next generation of scientific advances.”
Bloomberg writer Ike Swetlitz contributed to this report.
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