Innovation Asset Blog

FTC intervention boosts pharmaceutical competition

The pharmaceutical sector is no stranger to mergers and acquisitions, but a continued consolidation of the marketplace could have adverse effects for consumers. These issues took center stage earlier in the week as the Federal Trade Commission worked with four pharmaceutical companies to settle charges that a proposed acquisition may be anticompetitive.

Watson Pharmaceuticals and Actavis had planned to join forces under the terms of a multi-billion dollar deal, but FTC regulators filed a complaint insisting that such a partnership would reduce competition in more than 20 separate generic drug markets. The two companies were among only a select few manufacturers in many of these categories, raising concern that a collaboration could breach federal antitrust laws in several cases.

To remedy this situation, the FTC has proposed a settlement that will open their collective intellectual property portfolio to small competitors and waive exclusive marketing rights.

"The Federal Trade Commission will require [Watson and Actavis] to sell the rights and assets to 18 drugs to Sandoz International GmbH and Par Pharmaceuticals, and relinquish the manufacturing and marketing rights to three others, to settle charges that Watson's proposed $5.9 billion acquisition of Actavis would be otherwise anticompetitive," an FTC bulletin stated.ADNFCR-3832-ID-800886500-ADNFCR

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.