RARE Daily

FTC Sues to Block Amgen’s $27.8 Billion Acquisition of Horizon

May 17, 2023

Rare Daily Staff

The Federal Trade Commission filed a lawsuit to block Amgen’s acquisition of Horizon Therapeutics, saying the deal would allow the biotech giant to entrench the monopoly positions of Horizon medications used to treat thyroid eye disease and chronic refractory gout.

The FTC said the deal would enable Amgen to use rebates on its existing blockbuster drugs to pressure insurance companies and pharmacy benefit managers to favor Horizon’s two products—Tepezza, used to treat thyroid eye disease, and Krystexxa, used to treat chronic refractory gout. Neither of these treatments have any competition in the pharmaceutical marketplace.

“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,” said FTC Bureau of Competition Director Holly Vedova. “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.”

The $27.8 billion proposed acquisition was the largest pharmaceutical transaction announced in 2022. The FTC said given how central protecting and growing Tepezza and Krystexxa monopoly revenues are to the deal valuation Amgen calculated for Horizon, 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 FDA approval.

This action follows other ongoing work at the FTC in response to widespread complaints about rebates and fees paid by drug manufacturers to PBMs and other intermediaries to favor high-cost drugs at the expense of lower cost drugs. The commission has argued in a June 2022 policy statement that these financial relationships create multiple conflicts of interest and can shift costs and misalign incentives in a way that stifles competition from lower-cost or higher-quality drugs, thereby harming patients, doctors, health plans, and competition.

The FTC noted 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.

Amgen, in a statement on its website, said it believes in the benefits of the acquisition and it will work with the court on a schedule that will allow the transaction to close by mid-December.

“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,” the company said. “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.”

Photo: FTC Bureau of Competition Director Holly Vedova

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