FTC sues to bar Amgen from major IP $28bn acquisition
The $27.8 billion acquisition would allegedly enable the pharma giant to stifle competition for thyroid eye disease and chronic refractory gout treatments | There is currently no market competition for the treatments.
The US Federal Trade Commission is aiming to prevent biopharma firm Amgen from acquiring Ireland-based Horizon Therapeutics, arguing that the potential expansion in its IP portfolio could lead to significant antitrust and monopoly issues.
In a move confirmed in a statement released on May 16, the FTC said the deal would enable Amgen to entrench the monopoly positions of Horizon medications used to treat two serious conditions, thyroid eye disease and chronic refractory gout.
At present, these treatments— Tepezza and Krystexxa—do not face any competition in the marketplace.
High prices
Because of this, the FTC claims that Horizon charges high prices for those medications—approximately $350,000 for a six-month course of treatment of Tepezza and, approximately $650,000 for an annual supply of Krystexxa.
The FTC filed a lawsuit in a federal court to block the proposed acquisition—the largest pharmaceutical transaction announced in 2022.
Commenting on the suit, FTC Bureau of Competition director Holly Vedova said:
“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.
“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.”
According to the agency, Amgen has “strong incentives post-acquisition” to raise Tepezza and Krystexxa rivals’ “barriers to entry or dissuade them from competing as aggressively” if and when they gain approval to produce generic versions of the drugs from the US Food and Drug Administration.
California-based Amgen is one of the world’s largest pharmaceutical companies, with global sales of about $24.8 billion and a product portfolio of 27 approved drugs, including drugs Enbrel (for rheumatoid arthritis), Otezla (psoriasis), and Prolia (osteoporosis).
However, the FTC said that Amgen has a history of leveraging its broad portfolio of blockbuster drugs to gain advantages over potential rivals.
“In particular, the company has engaged in cross-market bundling, which involves conditioning rebates (or offering incremental rebates) on products such as Enbrel in exchange for giving Amgen drugs preferred placement on the insurers’ and PBMs’ lists of covered medications in different product markets,” noted the FTC.
“The value of the rebates that Amgen can offer on its high-volume drugs as part of its cross-market bundles may make it difficult, if not impossible, for smaller rivals who are developing drugs to compete against Tepezza and Krystexxa to match the level of rebates that Amgen would be able to offer.”
