Politics, Policy & Law
FTC’s ‘aggressive’ new approach to pharma merger regulation will include biotech M&A
Multilateral group to assess ‘new approach’ to M&A
Acting Chair Slaughter sketches plan for trade agency to consider blocking M&A rather than forcing divestitures while working with global partners.
Under the Biden administration, the U.S. Federal Trade Commission will more aggressively investigate, and may block, proposed mergers of pharmaceutical companies. While mergers of large drug companies will be subject to intensified scrutiny, the commission will also put acquisitions of small- and medium-sized biotechs under the microscope.
The FTC isn’t contemplating overturning the biotech industry’s business model, which is predicated on larger companies acquiring smaller companies, but it is likely to create more friction around transactions that in the past have not faced substantial regulatory oversight.
In addition to oversight over M&A, the FTC is also gearing up to use enforcement tools to prevent abusive drug pricing practices.
Acting FTC Chair Rebecca Kelly Slaughter, who is under consideration to become permanent chair, has long expressed deep skepticism about the effects of pharma mergers on competition and innovation, alarm about drug prices, and a conviction that the commission should take more energetic actions to police the industry.
Announcing a new initiative that is intended to lay the intellectual groundwork for expanding oversight over pharma mergers, Slaughter said on March 16 that the commission plans to reconsider its traditional approach to such mergers. It has focused on divestitures of overlapping