Would Your Company Like to Submit a Comment?
A proposed antitrust guidance from the DOJ and the FTC may warrant the scrutiny of drug companies and personalized medicine developers.
The draft guidance, "Draft Vertical Merger Guidelines," released on January 10, contains a passage that may be of unique importance to medicines companies. The passage describes a scenario is which one company is the "sole supplier" of an active ingredient needed for another company to make a drug (see below). Such a scenario may arise in the context of biosimilar manufacturing, among other examples.
"Example 5: Company A is the sole supplier of an active ingredient (the related product) for a pharmaceutical drug made by Company B (the relevant market). Company C is considering entering the relevant market. If Company B buys Company A, the merged firm may find it profitable to refuse to supply the ingredient to any rivals or potential rivals if doing so would deter Company C from entering, or prevent it from financing entry, by requiring it to start producing both the active ingredient and the drug at the same time (two stage entry). If refusing to supply entrants was profitable for the merged firm, and if the likely result was that competition in the relevant market would be substantially lessened compared to the level that would have obtained absent the merger, the merger potentially raises significant concerns and may warrant scrutiny."
The draft contains numerous other examples of the government's thinking on federal antitrust law.
Comments on the document must be received by February 11.
