The biotech industry has been at the forefront of innovation and breakthroughs that have brought us closer to finding cures for some of the most devastating diseases. However, recent antitrust scrutiny and regulations have put a damper on major acquisitions in the industry. Will this trend continue? In this blog post, we explore the current state of antitrust laws in biotech and what it means for investors, businesses, and ultimately patients who rely on these life-saving innovations. So buckle up and get ready to dive into this fascinating topic!
What is antitrust scrutiny?
In recent years, antitrust scrutiny has played a major role in halting several proposed acquisitions in the biotech industry. The most notable examples include AbbVie’s attempted purchase of Shire in 2014 and Pfizer’s attempted purchase of AstraZeneca in 2015.
Both of these deals were ultimately abandoned after it became clear that regulators would not approve them. In each case, the main concern was that the combined company would have too much power and would be able to raise prices without competition.
This type of antitrust scrutiny is likely to continue in the future, as the government looks to protect consumers from companies that are too big and powerful. This could make it difficult for some biotech companies to grow through acquisitions, as they may struggle to find willing buyers.
What are some recent examples of antitrust scrutiny in the biotech industry?
In recent years, antitrust scrutiny has played a major role in halting several potential major acquisitions in the biotech industry. In 2016, for example, Pfizer Inc. abandoned its $160 billion bid for Allergan plc after the U.S. Treasury Department proposed new rules that would have made the deal much more difficult to complete. And in 2017, Merck & Co., Inc. called off its planned $140 billion acquisition of Schering-Plough Corp after the U.S. Justice Department filed a lawsuit to block the deal on antitrust grounds.
These examples make it clear that antitrust authorities are paying close attention to the biotech industry and will not hesitate to intervene in deals that they believe may harm competition. This is likely to continue to be a major obstacle for any large biotech companies looking to make major acquisitions in the future.
How has antitrust scrutiny affected major acquisitions in the biotech industry?
In recent years, antitrust scrutiny has played a major role in halting several major acquisitions in the biotech industry. In 2016, for example, the US Department of Justice (DOJ) stopped two proposed mergers—one between Aetna and Humana, and another between Anthem and Cigna—citing concerns that the deals would have led to higher prices and reduced choices for consumers.
Similarly, in 2018, the DOJ sued to block a merger between Express Scripts and Cigna on the grounds that it would have harmed competition in the Medicare Part D prescription drug market. And earlier this year, the DOJ filed a lawsuit to stop a merger between T-Mobile and Sprint, again citing concerns about reduced competition and higher prices.
All of these cases show that antitrust enforcement is alive and well in the US, and that companies looking to merge or acquire must be mindful of the potential antitrust risks involved.
What does the future hold for antitrust scrutiny in the biotech industry?
The future of antitrust scrutiny in the biotech industry is uncertain. The Trump administration has been critical of antitrust enforcement, and it is not clear how aggressively the government will pursue antitrust cases in the biotech industry under Trump. However, there have been a number of high-profile antitrust cases in the biotech industry in recent years, and it is possible that this trend will continue.
