FTC Sues To Block Amgen’s $27.8-Bn Acquisition of Horizon Therapeutics

The US Federal Trade Commission (FTC) is suing to block Amgen’s pending $27.8-billion acquisition of Horizon Therapeutics, a Dublin, Ireland-headquartered bio/pharmaceutical company specializing in rare diseases, on the grounds that the acquisition would create a concentrated position in two disease areas: thyroid eye disease and chronic refractory gout. The companies had announced the acquisition in December 2022.

The FTC filed the lawsuit in federal court to block the transaction, saying it would enable Amgen to use rebates on its existing blockbuster drugs to pressure insurance companies and pharmacy benefit managers (PBMs) into favoring two products due to a lack of competition in two disease areas: Tepezza (teprotumumab-trbw) for treating thyroid eye disease and Krystexxa (pegloticase) for treating chronic refractory gout. 

Tepezza (teprotumumab-trbw) is Horizon’s best-selling drug with 2022 sales of $1.965 billion. Krystexxa (pegloticase) is the company’s second best-selling drug with 2022 sales of $716 million.  

“Amgen is disappointed by the FTC’s decision and remains committed to completing this acquisition, which will bring significant benefits to patients suffering from very serious rare diseases in the US and around the world,” said Amgen in a May 16, 2023, statement. “We have been working cooperatively over the past several months to address the questions raised by the FTC’s investigative staff and believe we have overwhelmingly demonstrated that this combination poses no legitimate competitive issues.” 

The FTC raised concerns that the acquisition of those products would enable cross-market bundling, which involves conditioning rebates (or offering incremental rebates) on products in exchange for giving drugs preferred placement on insurers’ and PBMs’ lists of covered medications in different product markets. The FTC said that such cross-market bundles may make it difficult, if not impossible, for smaller rivals who are developing drugs to compete against Tepezza and Krystexxa to match the level of rebates that Amgen would be able to offer. 

Amgen disputes the FTC’s concerns over potential cross-market bundling. “The medicines offered by Amgen and Horizon generally treat different diseases and patient populations, and there are no overlaps of competitive concern,” said Amgen in its May 16, 2023, statement. “The FTC’s claim that Amgen might ‘bundle’ these medicines (offer a multi-product discount) at some point in the future is entirely speculative and does not reflect the real-world competitive dynamics behind providing rare-disease medicines to patients. And we committed that we would not bundle the Horizon products raised as issues; however, the Commission still decided to pursue this path. Furthermore, we are unaware of any prior acquisition that has been blocked under a bundling theory.” 

Source: Amgen and the US Federal Trade Commission