Vedova: Pharmaceutical industry consolidations give ‘powerful companies a pass to exorbitantly hike prescription drug prices’

The Federal Trade Commission (FTC) is suing to block a large pharmaceutical corporation from acquiring a specialty biotech firm to avoid giving the corporation undue control over essential medicines.

The FTC filed the lawsuit to block biopharmaceutical company Amgen Inc. from pursuing its $27.8 billion acquisition of biotechnology company Horizon Therapeutics plc, according to a May 16 news release. The FTC argues that the merger would potentially grant Amgen a monopoly on certain medications to threat thyroid eye disease and chronic refractory gout, the news release reports.

The merger "would enable Amgen to use rebates on its existing blockbuster drugs to pressure insurance companies and pharmacy benefit managers (PBMs) into favoring Horizon’s two monopoly products – Tepezza, used to treat thyroid eye disease, and Krystexxa, used to treat chronic refractory gout," the FTC states in the release. "Neither of these treatments have any competition in the pharmaceutical marketplace."

The lawsuit, filed May 16 in the U.S. District Court for the Northern District of Illinois Eastern Division, asks for a temporary restraining order and preliminary injunction directing Amgen from acquiring HorizonAbsent “relief,” the acquisition would have commenced after 11:59 p.m. ET May 21.

California-based Amgen has global sales of approximately $24.8 billion and a product portfolio of 27 approved drugs, making it one of the world’s largest biopharmaceutical companies, the release reports. The company has a years-long history of building its portfolio by acquiring other firms, "thereby increasing its leverage with the insurers and PBMs that negotiate reimbursement for its products."

Horizon, a global biotechnology company based in Dublin, Ireland and Deerfield, Ill., has approximately $3.6 billion in sales in drugs that treat “rare, autoimmune, and severe inflammatory diseases,” according to the release.

The FTC reports that "Horizon has boasted that its Tepezza 'has no direct approved competition,' and that Krystexxa 'faces limited direct competition.' Because of this, Horizon charges extremely high prices for those medications – approximately $350,000 for a six-month course of treatment of Tepezza and approximately $650,000 for an annual supply of Krystexxa."

Amgen said in a statement that it is committed to complete the acquisition because of the benefits it would bring to people who have “very serious rare diseases in the U.S. and around the world.”

“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,” the statement reports. “We firmly believe in the benefits of this acquisition and intend to work with the court on a schedule that would allow the transaction to close by mid-December.”

Holly Vedoza, director of the FTC's Bureau of Competition, said in the release that the lawsuit is the first challenge to a merger brought by the FTC "in recent memory." She said the action sends the unmistakable message that the FTC will challenge acquisitions that allow pharmaceutical giants to increase their monopolies by taking advantage of consumers and competitors.

“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,” Vedoza said.