Federal Trade Commission sues to block Amgen’s acquisition of Horizon
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Key takeaways:
- The FTC says that the merger would stifle competition for the treatments of thyroid eye disease and gout.
- Amgen, which announced plans to acquire Horizon in December 2022 for a price of approximately $28 billion, called the FTC’s concerns “speculative.”
The Federal Trade Commission has sued to stop Amgen from acquiring Horizon Therapeutics, a potential blockbuster deal that could restrict marketplace competition, according to an FTC press release.
“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,” Holly Vedova, director of the FTC’s Bureau of Competition, said in the release. “Today’s action — the FTC’s first challenge to a pharmaceutical merger in recent memory — sends a clear signal to the market: The FTC won’t hesitate to challenge mergers that enable pharmaceutical conglomerates to entrench their monopolies at the expense of consumers and fair competition.”
In the release, dated May 16, the FTC argued that the purchase of Horizon by Amgen would enable the latter company to “leverage its portfolio of blockbuster drugs to entrench the monopoly positions of Horizon medications.”
Specifically, the release mentions teprotumumab-trbw (Tepezza, Horizon), used for the treatment of thyroid eye disease, and pegloticase (Kyrstexxa, Horizon), which is used for the treatment of gout. Regarding both therapies, Horizon has previously touted the lack of direct competition for the treatments in security filings, according to the FTC, resulting in the company charging “extremely high prices for those medications.”
The acquisition of Horizon by Amgen was initially announced in 2022 with a price tag of approximately $28 billion.
The FTC additionally argued that, as Amgen views both teprotumumab-trbw and pegloticase as key aspects of the deal, there is strong incentive on the side of Amgen to “raise Tepezza and Krystexxa rivals’ barriers to entry or dissuade them from competing as aggressively if and when they gain FDA approval.”
By substituting Amgen, with its “portfolio of blockbuster drugs and significant contracting leverage,” for Horizon, the FTC said the deal could provide the resulting merged firm the “ability and incentive to entrench Tepezza’s and Krystexxa’s monopolies through its multi-product contracting strategies,” the release said.
“This could effectively deprive patients, doctors and health plans from the benefits of competition and access to critical new options for treatment of thyroid eye disease and chronic refractory gout,” the FTC said.
Some of the FTC’s concern stem from Amgen’s past behavior of offering some forms of rebate in exchange for giving Amgen products preferred placement on insured medications lists, the release added.
In a responding statement, Amgen said it was “committed to completing this acquisition,” and characterized the government’s concerns as unfounded.
“Amgen is disappointed by the FTC's decision and remains committed to completing this acquisition, which will bring significant benefits to patients suffering from very serious rare diseases in the U.S. and around the world,” read Amgen’s statement, in part. “We have been working cooperatively over the past several months to address the questions raised by the FTC’s investigative staff and believe we have overwhelmingly demonstrated that this combination poses no legitimate competitive issues.”
Amgen argued that the FTC’s concern of combining medications, as in a “bundle,” are “entirely speculative” and not reflective of true business dynamics in the space.
“We committed that we would not bundle the Horizon products raised as issues; however, the Commission still decided to pursue this path,” read the statement. “Furthermore, we are unaware of any prior acquisition that has been blocked under a bundling theory. We firmly believe in the benefits of this acquisition and intend to work with the court on a schedule that would allow the transaction to close by mid-December,” Amgen said in its statement.”
Reference:
Amgen responds to FTC action RE: Proposed acquisition of Horizon Therapeutics. https://www.amgen.com/newsroom/press-releases/2023/05/amgen-responds-to-ftc-action-re-proposed-acquisition-of-horizon-therapeutics. May 16, 2023. Accessed June 5, 2023/
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