U.S. Consumer Groups Oppose Teva’s Bid for Drug Rival Mylan

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A Teva employee works with sterile products during the manufacture of pharmaceuticals inside Teva's factory in Hungary.Credit: Bloomberg

The American Consumers Union and seven other consumer groups Wednesday called on United States antitrust enforcers to prevent the proposal by Israel’s Teva Pharmaceutical Industries to purchase Mylan, saying it would lead to higher prices and more drug shortages.

At this point, there is no deal. Mylan has been rebuffing Teva’s takeover bids, including one in April for $40 billion, while pressing on with a $34 billion hostile bid for another pharmaceutical firm, Perrigo.

But the groups remain concerned. In their letter to U.S. Federal Trade Commission Chairwoman Edith Ramirez, they urged the FTC to look at more than just overlapping drugs made by both companies when determining if the merger is legal. The combined company, the letter said, would make 25% of all generic drugs. “We believe you will conclude that the merger would substantially lessen competition in violation of the antitrust laws, and should be blocked,” they said.

Even without the deal, the groups said that the prices of more than half the retail generic drugs on the market increased between July 2013 and July 2014. “In the last decade, there has been significant consolidation among generic drug manufacturers. This increased consolidation has already led to higher prices and to generic drug shortages,” the groups wrote in their letter. The groups also said that Teva and Mylan, between them, make 12 of the 70 drugs that the U.S. Food and Drug Administration says are in short supply.

“Along with exacerbating the current drug shortages of these medications, a merger between the two largest generic manufacturers would likely eliminate more manufacturing facilities, leading to reduced production and creating other shortages of generic and specialty drugs,” the letter said.

Teva, the world’s largest generic drug manufacturer, said in a statement that it was confident it could arrange sufficient asset sales to make the deal acceptable to antitrust enforcers. “Teva remains deeply committed to consummating a transaction with Mylan that offers an unparalleled opportunity for greater access to much needed medicines,” a company spokesperson said.

In addition to Consumers Union, the letter was signed by the Consumer Federation of America, the U.S. Public Interest Research Group, Public Citizen, Consumer Action, Consumer Watchdog, Community Catalyst, and the National Center for Health Research.

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