US FTC calls for divestments for Mylan acquisition of Agila Specialties to proceed

The USA’s Federal Trade Commission will require US generic drugmaker Mylan (NYSE: MYL) and Agila Specialties to divest 11 generic injectable drugs as a condition of allowing Mylan’s proposed $1.85 billion acquisition of Agila from parent Indian drugmaker Strides Arcolab (BO; 532531) (The Pharma Letter February 28). After initial resistance, the proposed acquisition has been cleared by Indian regulators (TPL August 22).

According to the complaint, in each of these 11 markets, Mylan and Agila are two of only a limited number of current or likely future competitors. The number of suppliers in generic pharmaceutical markets matters because prices generally decrease as the number of competing generic suppliers increases, says the FTC. In addition, the injectable generic products of concern are highly susceptible to supply disruptions caused by the inherent difficulties of producing sterile liquid drugs. The complaint alleges that, by reducing the number of competitors in these markets, the acquisition as originally proposed would eliminate important competition and likely lead to higher prices, absent the remedies required by the proposed consent agreement.

“This proposed settlement will ensure that these important generic injectable medications, which are used to treat conditions ranging from heart disease and hypertension to cancer, remain available at a competitive price, now and in the foreseeable future,” said Deborah Feinstein, director of the FTC’s Bureau of Competition, adding: “Preserving existing competition is especially important in markets for injectable drugs where supply disruptions have led to shortages.”