36 Annals of Health Law Vol. 25
utilizes the real-time drug pricing controversy involving Turing Pharmaceuticals and Valeant Pharmaceuticals as examples of the impact on cost associated with bio-pharma acquisitions. Next, the article explains the FTC’s role in pre-merger assessments and the basic requirements on industry imposed by federal legislation and FTC policy. The article then offers review and analysis of over fifty FTC actions involving mergers and acquisitions in the bio-pharmaceutical realm, drawing from three FTC publications. It characterizes core requirements and conditions set forth in the consent orders, and synthesizes the legal landscape gleaned from the FTC publications. The article then discusses implications for the future.
I. BIO-PHARMA CONSOLIDATION: CAUSE AND EFFECT
Several driving factors are cited for consolidation trends in bio-pharma. The first factor is healthcare reform, and specifically the evolving structure of the healthcare market. 10 The impact of the Patient Protection and Affordable Care Act (ACA) 11 can hardly be overstated. An emphasis on value-based health care and payment systems underlies the ACA, with the establishment of the Patient Centered Outcomes Research Institute (PCORI) leading the charge on comparative effectiveness research to inform evidence- based conversations about risks, benefits, and outcomes of different drug- based interventions. 12 Although healthcare reform and implementation of the ACA are typically associated with trends in hospital and health insurance consolidation generally, many commentators also point to them as factors in bio-pharmaceutical consolidation given the focus on costs and pricing across the healthcare system, including drug pricing. 13 Second, commentators cite massive failures of previous business models as driving mergers and acquisitions in the bio-pharma sector. 14 The strategy
10. Rita E. Numerof et al., The Affordable Care Act’s Impact on Innovation in Biopharma, 38 PHARMACEUTICAL TECH. 24, 24 (2014), http://www.pharmtech.com/ affordable-care-acts-impact-innovation-biopharma- 1. 11. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010). 12. The Patient Centered Outcomes Research Institute is an independent non-profit, nongovernmental agency tasked with improving “the quality and relevance of evidence available to help patients, caregivers, clinicians, employers, insurers, and policy makers make informed health decisions. Specifically, we fund comparative clinical effectiveness research, or CER, as well as support work that will improve the methods used to conduct such studies.” About Us, PATIENT-CENTERED OUTCOMES RES. INST. (Oct. 6, 2014), http://www.pcori. org/about-us. 13. Numerof et al., supra note 10; Ian D. Spatz, Health Reform Accelerates Changes in the Pharmaceutical Industry, 29 HEALTH AFF. 1331, 1331 (2010), http://content.healthaffairs. org/content/29/7/1331.full.pdf+html. 14. ‘Trying to Recapture the Magic’: The Strategy Behind the Pharma M& A Rush, KNOWLEDGE@WHARTON (May 28, 2014), http://knowledge.wharton. upenn.edu/article/trying-recapture-magic-strategy-behind-pharma-ma-rush/ [hereinafter