The Australian Competition and Consumer Commission will not oppose Pfizer Inc’s (Pfizer) proposed $US17 billion acquisition of Hospira Inc (Hospira).
Pfizer and Hospira are US-based global pharmaceutical companies that develop and supply biological medicines and biosimilars (a ‘generic equivalent’ of an original biological medicine). Biological medicines are used to treat a range of complex illnesses including cancers and auto-immune diseases like rheumatoid arthritis.
“Pfizer and Hospira are also the two largest suppliers of small molecule drugs in Australia, which are used in hospitals to treat illnesses including cancers, cardiovascular and metabolic diseases, epilepsy, and serious infections,” ACCC Commissioner Jill Walker said.
“The ACCC concluded from its investigations that there are sufficient alternative suppliers that will continue to compete with the merged entity in many of the small molecule markets.”
“In other markets, a number of suppliers have existing regulatory approvals and would have the ability to readily enter the market if given an incentive to do so.”
The ACCC found that many of the small molecule products to be acquired are old, low value molecules that have been subject to generic competition for some time.
In these markets, it is not unusual to see the entire market supplied by only one or two suppliers. In markets where the merged entity will become the sole supplier, the threat of entry by a competitor will constrain its ability to increase prices significantly.
In regard to biological medicines, the ACCC recognised there was a high degree of uncertainty regarding the development and supply of new biosimilars, including:
- the likelihood of successful development of products currently in clinical trials
- the likelihood of obtaining regulatory approval to market new biosimilars in Australia
- the success of marketing campaigns for these new products.
“The ACCC concluded that a number of alternative competitors were sufficiently advanced in developing biosimilars that Pfizer and Hospira were also developing,” Dr Walker said.
“The proposed acquisition was unlikely to reduce the incentives for these potential competitors to enter the Australian market in the future and compete with the merged entity.”
The ACCC conducted market inquiries with a range of interested parties.
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