Attorney General Keith Ellison joins nationwide task force on pharmaceutical mergers
Lowering cost of prescription drugs and ensuring fair marketplace among AG Ellison’s top priorities; new task force meets recommendation of AG’s report on report on drug prices
March 18, 2021 (SAINT PAUL) – Minnesota Attorney General Ellison today announced today that he is joining a nationwide task force of state attorneys general in response to the “Reimagining Pharmaceuticals Initiative,” led by the Federal Trade Commission (FTC), to update the national and international approach to analyzing the effects of pharmaceutical mergers.
“No one should have to choose between affording their lives and affording to live, but mergers in the pharmaceutical industry can make it impossible for people to afford the drugs that they need to live,” Attorney General Ellison said. “Lowering pharmaceutical drug prices and ensuring that federal and state governments have the antitrust tools we need to ensure a fair, competitive economy are two of my top priorities. This task force will help move those goals forward. I look forward sharing the steps we’ve taken in Minnesota with this national task force.”
In February 2020, Attorney General Ellison’s year-long, bipartisan Advisory Task Force on Lowering Pharmaceutical Drug Prices released a nearly 100-page report and recommendations for lowering drug prices. Notably, the report shed light on the dysfunctional nature of a highly complex and opaque pharmaceutical-drug market and the principal factors that contribute to a lack of transparency about prices and a lack of accountability for driving prices higher and higher.
One of the report’s recommendations (recommendation 5.6, p. 60) is to “strengthen laws targeting anticompetitive behavior in the drug industry.” One of that recommendation’s action steps (5.6.4) is that “Federal and state regulators should increase enforcement resources dedicated to reviewing mergers in the drug industry and blocking those that are anticompetitive.” The FTC task force that Attorney General Ellison has joined helps meet that recommendation.
The Reimagining Pharmaceuticals task force is a multistate working group, chaired by the attorneys general of California, Pennsylvania, and Wisconsin, that will report its findings to the FTC as part of its “Reimagining Pharmaceuticals Initiative.”
The FTC Initiative taps expertise from competition authorities with whom the FTC cooperates frequently, as well as others with relevant experience, to ensure the most effective enforcement in these crucial markets. The goal of this initiative is to identify concrete and actionable steps to review and update the analysis of pharmaceutical mergers. This project will ensure that FTC investigations include fresh approaches that fully analyze and address the varied competitive concerns that these mergers and acquisitions raise.
“Given the high volume of pharmaceutical mergers in recent years, amid skyrocketing drug prices and ongoing concerns about anticompetitive conduct in the industry, it is imperative that we rethink our approach toward pharmaceutical merger review,” said FTC Acting Chair Rebecca Kelly Slaughter. “Working hand in hand with international and domestic enforcement partners, we intend to take an aggressive approach to tackling anticompetitive pharmaceutical mergers.”
Among the questions the task force will consider are:
- How can current theories of harm be expanded and refreshed?
- What is the full range of a pharmaceutical merger’s effects on innovation?
- In merger review, how should we consider pharmaceutical conduct such as price fixing, reverse payments, and other regulatory abuses?
- What evidence would be needed to challenge a transaction based on any new or expanded theories of harm?
- What types of remedies would work in the cases to which those theories are applied?
- What have we learned about the scope of assets and characteristics of firms that make successful divestiture buyers?
