A specific focus of the European Commission and European Parliament is to investigate the effect potential mergers and acquisitions (M&As) will have on the state of the market.
The European Commission has released a new report on competition enforcement in the pharmaceutical sector. The report includes information on pharmaceutical competition litigation throughout Europe, and seeks to help lawmakers “strengthen the balance of pharmaceutical systems in the [European Union].”
Since 2009, the European Commission (EC) and the European Parliament (EP) have adopted 29 antitrust decisions against pharmaceutical companies. The European authorities work closely together in order to safeguard effective competition on pharmaceutical markets, and to protect patient access to affordable and innovative medicines. A specific focus of the EC and EP is to investigate the effect potential mergers and acquisitions (M&As) will have on the state of the market.
The EC has intervened in a number of mergers that were determined to potentially have led to price increases for patients. In terms of biosimilars, the EC took a specific interest in the merger of Pfizer and Hospira in 2015.
According to the report, “the Commission was concerned that the merger would do away with 1 of the 2 parallel projects to develop competing biosimilars.” This concern stemmed from the fact that, under the merger, Pfizer would take ownership of both Hospira’s infliximab biosimilar, and Pfizer’s own competing infliximab biosimilar that was being developed.
To address these concerns, the Commission produced in-depth reporting that looked into each pharmaceutical product that overlapped between the 2 companies, as well as other potential biosimilars being developed and how this merger could affect those products entering the market.
The Commission then approved the merger only after Pfizer agreed to divest certain parts of its business, such as the development and marketing of its biosimilar infliximab, as well as its sterile injectables business. In February 2016, Novartis announced that it had acquired the divested business.
The report reinforced the idea that competition authorities should remain vigilant in investigating potentially anticompetitive M&A arrangements, especially where “new practices used by companies or new trends in the industry are concerned, such as the growing relevance of biosimilars.”
Trade group Medicines for Europe, which represents the generic, biosimilar, and value-added medicines industries in Europe, praised the report, saying that the findings give valuable information on preventing delays to biosimilar and generic competition.
Said Adrian van den Hoven, director general of Medicines for Europe, in a statement, the report “shows the important role that competition rules play in the pharmaceutical sector…This is going to result in better access for patients and sustainable healthcare systems throughout Europe.”
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