2016 A Profile of Bio-pharma Consolidation Activity 49
Forest Laboratories/Actavis133 Prestige Brands/Insight Pharmaceuticals, LLC. 134 Valeant Pharmaceuticals International/Precision Dermatology135 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– These three reports were consulted and analyzed in order to address the following general inquiry: what limitations has the FTC imposed on mergers and acquisitions in the bio-pharma realm through pre-merger enforcement actions? The methodology entailed identification of bio-pharma companies in each of the three reports for inclusion in the assessment. Medical device companies, health insurance companies, and hospitals were excluded from assessments as outside the realm of the bio-pharma sector. Also excluded were enforcement actions that were ultimately dismissed or enforcement actions where the parties cancelled the planned transaction. Each relevant description involving a bio-pharma company was then reviewed and characterized in terms of consent order requirements, as set forth by the FTC report. Report descriptions included both FTC adjudications resulting in consent order and litigation resulting in consent order. The end of each description within the reports identified the core consent order requirements. There are several limitations to this methodological approach. The first is reliance on the FTC report summations of the consent order rather than on analysis of the consent orders themselves. The second is incomplete information on a number of fronts, including a lack of: detailed characteristics of each transaction, the number and extent of drug products involved, concessions made by the company during the course of adjudication, and follow-up information on how the companies fulfilled the consent order requirements. The third is that the reports provide no indication of why the FTC flagged these particular transactions as problematic, and relatedly, why other transactions were not flagged for enforcement action. General features mentioned within the report descriptions do provide some guidance on why the deals were flagged by the FTC. These noted features included the monetary size of the deal, the relationship between the companies and their competitive positions, the markets involved (e.g., generic, brand, or specialty drug markets), and the potential impact on the availability of particular drug products resulting from the transaction. Despite these limitations, the methodology does provide a useful glimpse at the defining characteristics of FTC requirements for bio-pharma mergers and
133. Actavis PLC, F.T.C. No. 1410098, at 2-42 (Aug. 29, 2014), https://www.ftc.gov/ system/files/documents/cases/140905actavisdo.pdf. 134. Prestige Brands Holdings, Inc., F.T.C. No. 1410159, at 2-28 (Oct. 7, 2014), https://www.ftc.gov/system/files/documents/cases/141014prestigebrandsdo.pdf. 135. Valeant Pharm. Int’l, Inc., F.T.C. No.1410101, at 2-32 (Aug. 20, 2014), https://www.ftc.gov/enforcement/cases-proceedings/141-0101/valeant-pharmaceuticals- international-precision-dermatology.