Eight Democratic senators and one independent are asking regulators to exercise greater scrutiny over mergers of large drug companies.
In a letter to Federal Trade Commission Chairman Joseph Simons Tuesday, the senators urged the agency to closely scrutinize mergers in the biopharma industry that raised issues around competition, especially as rising costs of prescription drugs have become a significant public policy issue.
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Sen. Amy Klobuchar, D-Minnesota and ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights led the letter. Seven other Democratic senators – Richard Blumenthal of Connecticut, Cory Booker of New Jersey, Mazie Hirono of Hawaii, Kamala Harris of California, Elizabeth Warren of Massachusetts, Tammy Baldwin of Wisconsin, Tina Smith of Minnesota and independent Bernie Sanders of Vermont were also signatories. Klobuchar, Booker, Harris, Warren and Sanders are also running for president on the Democratic ticket.
“This industry consolidation is occurring against a backdrop of ever rising prescription drug spending and reports that one-in-four people taking prescription drugs have difficulty affording their medication,” the letter read. “It is more important than ever that the FTC take appropriate action to protect consumers.”
2019 has seen two high-profile biopharma acquisition deals. In January, New York-based Bristol-Myers Squibb put up $74 billion to acquire Summit, New Jersey-based biotechnology giant Celgene. And in June, Chicago-based AbbVie announced it would spend $63 billion to acquire Ireland-headquartered Allergan. Smaller deals, albeit still valued in the billions of dollars, have included Eli Lilly & Co.’s $8 billion acquisition of Loxo Oncology in January and Roche’s February acquisition of Spark Therapeutics for $4.3 billion. However, that deal has been delayed because of concerns among regulators about its effects on competition and consumers.
The senators expressed worry about potential antitrust issues regarding the BMS-Celgene and AbbVie-Allergan deals. To be sure, the companies have sought to address antitrust concerns by divesting key assets. Last month, Celgene said it would sell the psoriasis drug Otezla (apremilast) to Amgen for $13.4 billion if the deal goes through, and it has returned to Chinese drugmaker BeiGene the rights to the PD-1 inhibitor tislelizumab. Allergan has said it will divest the investigational inflammatory bowel disease drug brazikumab and Zenpep (pancrelipase), its marketed pancreatic enzyme deficiency drug.
Still, the senators expressed concern about the mergers potentially stifling innovation. The deals could also give the combined companies greater ability to create “rebate traps,” whereby they would have greater leverage to secure favorable positions for their drugs on formularies by offering volume-based rebates that rivals would not be able to match. Drugs cited in the letter as raising such concerns included AbbVie’s autoimmune disease drug Humira (adalimumab) and Celgene’s blood cancer drug Revlimid (lenalidomide). Both drugs are their respective manufacturers’ top-selling products, though they also face biosimilar and generic competition in the coming years when they lose patent protection.
Photo: dkfielding, Getty Images
