Generic drugmaker Mylan wins US antitrust approval to buy Agila
The Federal Trade Commission (FTC) determined a proposed deal by the giant generic drug manufacturer, Mylan Inc. to acquire Indian drugmaker Agila Specialties for $1.85 billion would violate federal antitrust regulations. The FTC ordered that Mylan Inc., headquartered in Cecil Township, PA, divest eleven injectable drugs from the portfolio it is acquiring from Bangalore-based Agila. Mylan produces more than 500 injectable drugs and Agila makes about 300. The proposed agreement will double Mylan’s injectable drugs portfolio.
The FTC’s complaint alleged the proposed acquisition would compromise competition for six existing generic drugs and reduce future competition of four other drugs. The antitrust commission recommended the companies sell specific drugs, either from Mylan’s stable or from Agila’s portfolio. The order to divest assets included eleven drugs.
The proposed assets to be divested are: anti-arrhythmic heart drug amiodarone hydrochloride used to treat patients with recurring unstable ventricular tachycardia; surgical anesthetic etomidate injection; cancer drug fluorouracil; hypertension drug labetalol hydrochloride; detoxifying agent mesna; pediatric cancer drug methotrexate sodium (preservative-free); acetylcysteine injection, used to minimize liver damage following an acetaminophen overdose; fomepizole injection, used to treat some times of accidental poisoning; antiviral herpes drug ganciclovir; last-resort antibiotic meropenem; and transplant drug mycophenolate mofetil, currently only a branded drug, but slated to have a generic release soon.
The FTC stated that the divestiture was required because there are very few suppliers of generic injectables. In a statement released by the FTC, the agency reiterated the importance of competition in the marketplace. The price of generic pharmaceuticals generally decreases when the number of generic manufacturers increases. Allowing the deal to go through could have led to shortages by disrupting existing competition.
At the heart of the antitrust settlement was amiodarone hydrochloride, primarily used in hospitals to treat patients with irregular hearbeats. The acquisition would have reduced the suppliers of amiodarone hydrochloride from five to four. The United States only has three suppliers of amiodarone hydrochloride – with Mylan controlling a sixty percent share of the market. When Mylan announced the plan to acquire Agila in February, 2013, it said the greater manufacturing capacity would help it deal with potential drug shortages of sterile injectables.
Mylan made an agreement with the FTC it would divest seven drugs and Agila would sell the remaining four. The agreement will ensure that drugs used to treat conditions from cancer to heart disease will remain available to consumers at competitive prices. JFP Pharmaceuticals will purchase rights to produce four drugs. Intas Pharmaceuticals is purchasing the rights to two drugs. The remaining divested drug will go to Gland Pharma Ltd. Agila will sell two medications to JHP Pharmaceuticals and the remaining two to Sagent Pharmaceuticals Inc.
The deal likely came under such scrutiny since shortages of sterile injectables account for eighty percent of drug shortages in the United States. Forty percent of those shortages are due to quality issues. However, Agila is believed to have a high-quality manufacturing platform.
The deal is not done yet. The FTC will publish a description of the consent agreement in the Federal Register and it will be subject to public comment for thirty days, continuing through October 28, 2013.