FTC Attempts To Block Major Biotech Company Merger

Forbes Business Policy FTC Attempts To Block Major Biotech Company Merger Grace-Marie Turner Contributor Opinions expressed by Forbes Contributors are their own. Focusing on free-market ideas for health reform Following Aug 28, 2023, 11:11pm EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin The FTC Building getty In yet another action that would quash medical innovation, Biden administration appointees are trying to block a corporate merger that would allow drugs developed to treat rare but debilitating eye and gout diseases to reach many more patients. The Federal Trade Commission (FTC) has sued in federal court to block Amgen’s acquisition of Horizon Therapeutics, a small, innovative company based in Ireland, on speculative grounds that somehow the deal might someday in the future discourage potential competition.

This is a massive misuse of the FTC’s authority, and the threat alone chills investment s in new research with a dark cloud of regulatory uncertainty. The FTC’s actions also place a significant drag on economic productivity as U. S.

-based corporations fight burdensome, expensive and wasteful regulatory reviews and delays. The proposed Amgen-Horizon deal, worth nearly $28 billion, is one of the biggest merger deals of the year and is being closely watched . Amgen announced in December 2022 its proposed merger with Horizon, a biotech company focused on developing medicines to treat patients with rare autoimmune and severe inflammatory diseases.

The FTC waited six months before filing suit in federal court in May calling for an injunction against the deal. It is on the docket to be heard in Chicago on September 11. MORE FOR YOU Leak Reveals Elon Musk, X And Wall Street Could Be About To Cause Bitcoin And Crypto Price Chaos With ‘PayPal Update’ Apple iPhone 15 iPhone 15 Pro Release Date Schedule Your Complete Countdown Xbox Is About To Leave PlayStation In Starfield s Glittering Space Dust On Friday, media reports said the FTC suspended separate internal proceedings to block the deal, a signal that it may be ready to engage in settlement negotiations.

Amgen has said all along it will agree to terms to address the FTC’s complaint. “We would be pleased if our commitment were honored instead of going through a lengthy court process,” Amgen said in a statement, as quoted by Reuters . The FTC doesn’t even pretend in its suit to show that consumers would be harmed on the grounds that one company is buying up another with a competing product—usual grounds for blocking a deal.

Instead, it is basing its suit on the speculative threat that Amgen might someday decide to “bundle” Horizon’s medicines with other Amgen products in future Pharmacy Benefit Manager (PMB) contracts, claiming that would chill future “potential competitors. ” Amgen says in its response to the FTC lawsuit that it does not have any contracts that bundle a pharmacy benefit product with a medical product today and has committed that it has no intention of bundling these drugs and will not do so in the future. Horizon’s two drugs at issue are TEPEZZA, which treats thyroid eye disease, and KRYSTEXXA for chronic refractory gout.

Both are designated by the FDA as “orphan drugs” because they treat rare diseases. Patients have few other treatment options, and these drugs can have life-altering benefits to them. TEPEZZA, for example, can help patients avoid barbaric eye surgeries.

Raising awareness among ophthalmologists about the drug would mean many more patients could benefit from this alternative treatment. KRYSTEXXA is used to manage serious and often debilitating gout that can lead to diabetes and kidney and other organ failure. Both drugs need to be administered by physicians.

Patients and the marketplace benefit when larger companies like biotech giant Amgen buy smaller companies because it means the most promising and innovative medicines can reach more patients more quickly. The biopharmaceutical industry depends upon a robust innovation ecosystem comprised of smaller companies that undertake robust research initiatives, often leveraging venture capital dollars while larger companies, with broader scale and reach in terms of research and development and reliable manufacturing capability, collaborate with smaller companies and often acquire promising medicines in the early stages of development. Amgen’s vast production capability also allows a reliable supply of the drugs for patients with few or no other treatment options.

Horizon largely uses a contract manufacturer to make its products, but the primary manufacturing facility was taken over under the Defense Production Act during COVID, interrupting the supply of medicines to patients. Amgen says in its response to the Chicago court filing that the FTC’s actions are misguided and unprecedented. “Given the lack of any material competition between Amgen and Horizon, the Transaction should have been cleared months ago under well-established precedent; and Amgen, Horizon and their patients should already be realizing the Transaction’s significant benefits.

” No European country has objected to the merger, and only six deep-blue states in the U. S. responded when the FTC encouraged them to join the suit.

The California-based Amgen says the FTC’s “allegations are far too speculative to support a showing of probable or imminent harm to competition. ” The Wall Street Journal editorialized that “the FTC claims that if a smaller company were to someday gain approval for a competing drug, Amgen might then offer PBMs larger rebates for its other drugs in return for giving Horizon’s treatments preferred placement on insurer formularies,” discouraging potential competition. “The FTC doesn’t even attempt to show consumer harm.

” But there will be consumer harm if the FTC succeeds in quashing this deal. Not only will patients with these rare diseases who are desperate for treatments be much less likely to have access to the medicines, but millions of others will never see new, better, often life-saving treatments developed by small, determined companies whose products die on the research table when investor funding dries up. We have been writing about the enormous harm being done by the price control regime the Biden administration is launching to target the most prescribed drugs for Medicare patients.

The FTC is joining the fray with this separate effort that will harm even more immediately the most vulnerable patients who are desperate for treatments and cures. The House Judiciary Committee, under Chairman Jim Jordan , and the House Oversight Committee, under Chairman James Comer, are conducting oversight hearings of the Federal Trade Commission, questioning Chair Lina Kahn about her agency’s overreach, mismanagement, and disregard for ethics . Chairman Comer says the FTC is becoming a “rogue agency” that is undermining consumer confidence in its important role to protect the American marketplace.

They are correct. It’s time for the government to put patients first and stop advancing an ideological agenda that violates the physicians’ creed to “First Do No Harm. ” Follow me on Twitter .

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