WASHINGTON, Could 18 (Reuters) – The Federal Commerce Fee (FTC) faces an uphill battle in its battle towards Amgen Inc's (AMGN.O) $27.8 billion acquisition of Horizon Therapeutics (HZNP.O) with an untested argument earlier than a Trump-appointed decide, three antitrust consultants mentioned.
Moreover, the FTC's criticism, unsealed late Tuesday, expresses concern about offers struck between drug corporations that give reductions to pharmacy profit managers and insurers in return for making their medicines simpler to get for his or her prospects.
That would seem to contradict the FTC's apply of stopping corporations from utilizing market energy to push up costs.
“Any time a criticism is placing forth a novel idea it is an uphill battle,” mentioned Katie Funk, an antitrust legal professional at Baker, Donelson, including that they might want to persuade the decide that “the alleged anticompetitive results are usually not baseless, however are critical and substantial.”
The FTC lawsuit spurred concern amongst buyers who had dismissed the antitrust threat in Amgen's deal due to its restricted enterprise overlap with Horizon. They now worry different potential offers within the drug sector – the place many smaller companies are purchased up by sector giants – could also be imperiled.
The FTC may additionally battle to persuade the decide listening to the case, Decide John Kness, who was nominated to the courtroom by former President Donald Trump. Whereas it's unsure how Kness will view the case, judges appointed by Republican presidents are typically seen as extra business-friendly of their strategy.
To make sure, some antitrust consultants mentioned they wanted to see the FTC's proof and the way properly it might get up its criticism earlier than guessing on the end result.
In its lawsuit the FTC mentioned it believed Amgen may leverage its huge promoting medication to strain insurance coverage corporations and pharmacy profit managers to favor Horizon's two key merchandise – the fast-growing thyroid eye illness remedy Tepezza and gout drug Krystexxa – over potential rivals.
The FTC mentioned it filed the lawsuit on behalf of sufferers who wanted expensive remedies for critical circumstances who could also be harm by the deal. “Our criticism is firmly rooted in longstanding antitrust legislation and we stay up for making our argument in courtroom,” an FTC spokesperson mentioned.
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Amgen mentioned on Tuesday it had made a suggestion to the FTC in hopes of resolving the difficulty. “We dedicated that we might not bundle the Horizon merchandise raised as points,” Amgen mentioned in a press release.
That type of dedication, usually known as a behavioral treatment, has fallen out of favor with antitrust enforcers who don't view such agreements as efficient.
The issue for the FTC is that the negotiations between pharmacy profit managers and drug makers usually lead to decrease costs for the medication, mentioned Andre Barlow of Doyle, Barlow and Mazard, PLLC.
“The FTC may have a excessive hurdle to beat with this criticism,” he mentioned. “The antitrust legal guidelines don't condemn decrease costs, somewhat they embrace them.”
Seth Bloom of Bloom Strategic Counsel agreed that the FTC's idea was novel however mentioned it was unclear how the case can be determined.
“These are legitimate considerations that FTC has raised however what a courtroom will do about it's unsure,” he mentioned. “The truth that it is a decide appointed by Trump who you'd anticipate to be extra conservative means that the FTC may have a tougher street right here.”
Reporting by Diane Bartz; Modifying by Sonali Paul
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