November 09, 2023

Warren to FTC after Big Pharma Merger: Preserve Competition, Reject Behavioral and Structural Remedies

Text of Letter (pdf)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan and Commissioners Bedoya and Slaughter expressing disappointment with the FTC’s proposed consent order allowing pharmaceutical giant Amgen to move forward with its acquisition of Horizon Therapeutics (Horizon) and urging the FTC to reject the use of behavioral and structural remedies going forward. In the letter, the Senator underscores FTC’s responsibility to hold Big Pharma accountable and protect competition and access to pharmaceutical products, given concerns that deals such as this one could raise the price of medicine.

“I am writing to express my disappointment with the FTC’s decision to allow pharmaceutical giant Amgen to move forward with its acquisition of (Horizon) pursuant to a consent order. Amgen, which has a long history of employing anticompetitive business tactics, completed its acquisition of Horizon, which has faced repeated criticisms for hiking its drug prices, in October 2023. The proposed consent order resolving the FTC’s suit against Amgen aims to address antitrust issues present in the transaction through behavioral remedies, but I remain concerned regarding the effects of this deal on the price and availability of medicine. I urge the FTC to reject the use of remedies – both behavioral and structural – in merger review and to vigorously challenge consolidation and anticompetitive behavior in the health care industry, consistent with its proposed merger guidelines,” wrote the Senator. 

The pharmaceutical industry has engaged in rampant consolidation in recent decades. Between 1995 and 2015, the 60 leading pharmaceutical companies merged down to only 10 firms. Innovation and access to affordable drugs has directly suffered as a result. Amgen has built patent thickets and made pricing decisions driven by aggressive revenue targets that resulted in exorbitant profits and executive payouts. Amgen’s $27.8 billion acquisition of Horizon adds Horizon’s rare immune-disease drugs to Amgen’s already extremely profitable pharmaceutical lineup, giving Amgen even more opportunities and market power to continue jacking up prices and squeezing money out of patients. The Senator urged the FTC in a previous letter to carefully scrutinize the merger between Amgen and Horizon.

“I was encouraged by the FTC’s decision in May 2023 to file suit to block Amgen’s acquisition of Horizon, citing concerns that the deal would ‘allow Amgen to leverage its portfolio of blockbuster drugs to entrench the monopoly positions of Horizon medications used to treat two serious conditions, thyroid eye disease and chronic refractory gout.’ This action marked the FTC’s first litigated challenge to a pharmaceutical merger in over a decade, and it appeared to send a powerful signal to Big Pharma that they should not, and will not, be allowed to violate antitrust law and harm patients with no accountability,” continued the Senator.

However, the subsequent settlement between FTC and Amgen clearing the way for the merger to proceed has led some Wall Street analysts to conclude that “review of other pending pharmaceutical deals could potentially pan out favorably for the companies involved,” allowing the sector to “breathe a sigh of relief.”

“The FTC has the power and responsibility to hold Big Pharma accountable and protect access to pharmaceutical products for millions of Americans that are struggling to pay for prescription drugs. We urge you to have confidence in the FTC’s and DOJ’s correct reading of antitrust statutes and Supreme Court precedent and, consistent with the proposed merger guidelines, block any pharmaceutical mergers that pose anticompetitive harms,” concluded the Senator.