FTC sues to block Amgen's acquisition of Horizon Therapeutics
By Eleanor Laise
Deal could allow Amgen to 'entrench the monopoly positions' of two Horizon medications, regulators say
The Federal Trade Commission is suing to block biopharma giant Amgen Inc.'s (AMGN) proposed acquisition of Horizon Therapeutics PLC (HZNP), saying the deal would allow Amgen to "entrench the monopoly positions" of Horizon treatments for two serious medical conditions.
By acquiring Horizon, Amgen could use rebates on its blockbuster drugs to pressure insurance companies and pharmacy benefit managers to favor Horizon treatments for thyroid eye disease and chronic refractory gout, the FTC said. Those treatments, Tepezza and Krystexxa, have no competitors, the agency said.
By offering attractive rebates on high-volume drugs such as Enbrel, Amgen can get preferred placement for other products on insurers' and PBMs' lists of covered drugs, the FTC said. The value of such rebates on Amgen's blockbuster drugs, the agency said, "may make it difficult, if not impossible, for smaller rivals" developing treatments to compete with Tepezza and Krystexxa to match Amgen's offer.
The proposed $27.8 billion deal, announced late last year, is the largest pharmaceutical transaction announced in 2022, the FTC said.
"Amgen is disappointed by the FTC's decision and remains committed to completing this acquisition," the company said in a statement. After working for several months to address the FTC's questions, Amgen said it had "overwhelmingly demonstrated that this combination poses no legitimate competitive issues."
Amgen made a commitment not to "bundle," or offer multiproduct discounts tied to the Horizon products at issue in the FTC complaint, the company said in its statement. Horizon said in a statement that it also has no plans to bundle any of its rare-disease treatments and that the deal "has the potential to accelerate the availability of important rare disease medicines to more patients worldwide."
The FTC's lawsuit comes amid a spate of pharmaceutical deal making, including Pfizer Inc.'s (PFE)announcement in March that it would acquire Seagen Inc. (SGEN) and Merck &Co.'s (MRK)agreement last month to buy Prometheus Biosciences Inc. (RXDX). The FTC also launched an investigation last year into pharmacy benefit managers, saying it would examine how the major prescription-drug middlemen vertically integrated with insurance companies and mail-order and specialty pharmacies are influencing the accessibility and affordability of prescription drugs.
"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," Holly Vedova, director of the FTC's competition bureau, said in a statement. The lawsuit filed Tuesday, she said, sends a signal that the agency will challenge deals that let pharmaceutical companies entrench monopolies "at the expense of consumers and fair competition."
Amgen shares are down 1.3% on Tuesday, while Horizon shares are down 15%.
-Eleanor Laise
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May 17, 2023 08:30 ET (12:30 GMT)
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