International Regulators Set Their Sights On Pharma Consolidation


A working group has been formed between the European Commission, the United States Justice Department and Federal Trade Commission, the Canadian Competition Bureau, and the UK's Competition and Markets Authority, “to analyse the effects of mergers in the pharmaceutical sector.”


M&A in the pharmaceutical industry has been very hot in recent years, driven in part by young companies seeking scale and diversification. Large scale deals, on the other hand, have been driven by older pharma giants looking to supplement their portfolios with unique patent protected drugs and their development pipelines with promising new therapeutics which are already in testing.


This has led to concerns by regulators that large pharma companies are consolidating too much pricing power and influence, crowding out competition and hurting the consumer.


International regulators do not seem to be overstepping their bounds by examining the issue closely. M&A has a checkered past in the pharmaceutical business, as is highlighted by Valeant, now known as Bausch Health. The company drove up profits by acquiring unique drugs and inflating prices, hurting consumers and attracting investigation. Now the regulators are trying to ensure that doesn’t happen again.