In a bold move, pharmaceutical giants, including AbbVie, Amgen, Gilead, Merck, and Novartis, have joined forces to create a formidable 31-member coalition known as the Partnership for the U.S. Life Science Ecosystem, or PULSE. Their mission? To stand up against a proposed overhaul of federal antitrust guidelines and champion mergers and acquisitions that fuel innovation in the industry.
PULSE has sounded the alarm, asserting that the Federal Trade Commission’s (FTC) new antitrust enforcement strategy diverges from a long-standing tradition of promoting pro-innovation mergers and acquisitions. They argue that if this “flawed approach” to merger reviews persists, it could jeopardize the vibrant ecosystem responsible for groundbreaking medical breakthroughs.
The game-changing moment arrived in July 2023 when the Department of Justice (DOJ) and FTC unveiled new draft merger guidelines, signaling a significant shift in how they scrutinize mergers across various industries, including pharmaceuticals. One pivotal principle in these guidelines is the stance that mergers should not substantially increase concentration in already saturated markets.
Notably, the FTC has broadened its focus beyond direct competition, now considering how companies leverage their negotiation power. Moreover, the agencies proposed changes to the pre-merger notification and review process, potentially extending the deal-review timeline by two to three months. They argue that these alterations will enhance their ability to screen transactions more effectively for antitrust concerns.
Amgen, a founding member of PULSE, found itself in the FTC’s crosshairs in May 2023 when it sought to acquire Horizon Therapeutics. Although a lawsuit initially sought to halt the deal, an agreement was eventually reached in September, allowing the $27.8 billion acquisition to proceed.
This case spotlighted the Biden administration’s intensified scrutiny of the industry’s rebating practices, as the FTC expressed concerns about Amgen potentially influencing pharmacy benefit managers through rebates on its drugs, favoring Horizon treatments in the process.
PULSE passionately asserts that discouraging pro-innovation mergers and acquisitions could disrupt the intricate web of relationships within the life sciences ecosystem. This, they argue, risks stalling advancements in treatments and cures, while also imperiling jobs, wages, and economic growth in every corner of the nation.
Their strategy revolves around rallying their members to collectively emphasize the shared efficiencies and expertise gained through mergers and acquisitions in the development process. Additionally, they aim to shed light on the economic significance and community benefits of such transactions, fostering growth and progress on a broader scale.