A coalition of consumer advocacy groups is urging the federal government to block a hostile takeover of local generic drugmaker Mylan by Israel’s Teva Pharmaceutical Industries, saying the combination of the two drug giants could drive up prices for generic medications.
In a letter to the Federal Trade Commission released Tuesday by eight groups — including Consumers Union, the Consumer Federation of America and U.S. PIRG — the coalition called on the agency to thoroughly investigate the merger and “take action to block it.”
Besides raising generic drug prices, the merger could lead to more drug shortages and reduce development of new medications, the letter said.
Mylan, the world’s third biggest generic drugmaker, has rejected Teva's $40 billion offer, but Teva has vowed to continue its pursuit. The Israeli company, the largest generic company in the world, is widely expected to increase its $82-a-share offer.
“[We] have watched with growing concern in recent years as the generic drug industry has become increasingly concentrated,” the consumer groups wrote.
“This increased consolidation has already led to higher prices and to generic drug shortages,” the letter stated.
A merged Teva/Mylan would have a 25 percent market share of generic drugs and would have “a virtual lock” on a number of key generics, the coalition said.
In an email, Teva said joining with Mylan would “create a more efficient platform for the benefit of customers and consumers” and offer “unparalleled opportunity for greater access to much needed medicines.”
Mylan did not respond to emails seeking comment.
Mylan, which is trying to acquire Irish over-the-counter drug specialist Perrigo to fend off Teva, has said a merger with Teva would be a poor cultural fit and would not win antitrust clearance. Teva has disagreed, saying it believes it would get regulatory approval before the end of the year.
“Teva is confident it can quickly make any necessary divestitures to achieve antitrust clearance,” the company said in its email Tuesday.
But another coalition member said divestitures would not solve the problem.
“The extensive harms to competition and consumers can’t be stopped by divesting specific lines of generic drugs,” said Linda Sherry of Consumer Action. “We see no path forward that would make this merger OK.”
Earlier this year, Mylan reincorporated in the Netherlands to cut its tax bill, but continues to run the company from Cecil.
Patricia Sabatini: psabatini@post-gazette.com.
First Published: July 14, 2015, 2:57 p.m.
Updated: July 15, 2015, 2:02 a.m.
