FTC Sued to Block Amgen’s $28 Billion Acquisition of Horizon, a Worrying Sign for Biopharma M&A

The U.S. Federal Trade Commission (FTC) has taken a significant step by filing a lawsuit to prevent Amgen's proposed $27.8 billion acquisition of Horizon Therapeutics. This move marks a departure from the FTC's previous focus on specific product overlaps in its reviews and instead highlights the companies' past behaviors concerning drug pricing.

The FTC's challenge, supported by a unanimous vote among the three Democratic commissioners, aims to obtain a temporary restraining order and preliminary injunction to halt the transaction from proceeding.

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Although Amgen and Horizon have some product overlaps for specific pipeline candidates, analysts from RBC Capital Markets have emphasized that both companies have limited commercial influence in those areas. Despite this, the FTC's focus on the companies' past conduct raises concerns about drug pricing practices in the biopharmaceutical industry.

Amgen has responded to the FTC's allegations by arguing that the claim surrounding drug bundling is purely speculative and does not reflect the competitive dynamics of providing rare-disease medicines to patients. The company has even made promises not to bundle Horizon's products. However, despite these assurances, the FTC remains determined to block the deal.

This development has raised alarm bells within the biopharmaceutical industry, as it indicates a shift in the FTC's approach to mergers and acquisitions. By expanding its scrutiny to include companies' historical pricing practices, the FTC is sending a clear message that it intends to closely examine the potential impact of these deals on drug prices and competition.

Furthermore, the lawsuit against Amgen and Horizon serves as a cautionary tale for other biopharmaceutical companies considering similar mergers and acquisitions. It underscores the need for careful consideration of past pricing practices and potential antitrust concerns when pursuing such transactions.

The outcome of this case will have far-reaching implications for future biopharma mergers and acquisitions. If the FTC successfully blocks the Amgen-Horizon deal, it could signal a more stringent regulatory environment, forcing companies to reassess their M&A strategies and evaluate potential antitrust risks more thoroughly.

It is important to note that this lawsuit does not revolve solely around specific product overlaps but rather focuses on the broader issue of drug pricing practices. The FTC's intervention in this case suggests a growing emphasis on preventing potential anticompetitive behavior and protecting consumers' access to affordable medications.

By scrutinizing past behaviors around drug pricing, the FTC aims to ensure a competitive market and safeguard patients' access to vital medications. This development serves as a wake-up call for the industry, urging careful consideration of antitrust concerns in future M&A endeavors.