Pharma megamergers need to go under a microscope, Senators tell FTC

AbbVie is working to close its $63 billion buyout of Allergan. (AbbVie)

Big M&A has returned to pharma smack in the middle of a fierce drug pricing debate—and a group of senators is urging the Federal Trade Commission to weigh those deals accordingly.

Of particular interest? AbbVie's proposed $63 billion Allergan buyout and Bristol-Myers Squibb's Celgene merger.

In a letter to FTC chairman Joseph Simons, Sen. Amy Klobuchar and colleagues wrote that the agency should closely review AbbVie’s Allergan acquisition and Bristol-Myers Squibb’s proposed $74 billion takeout of Celgene, plus other pharma mergers.

Unions and public interest groups have already called on the FTC to take a close look at AbbVie’s Allergan deal.

M&A has been picking up across the economy, the senators wrote, pharma included. And specifically in the drug industry, “consolidation is occurring against a backdrop of ever-rising prescription drug spending and reports that one in four people taking prescription drugs have difficulty affording their medication,” they wrote. 

It’s “more important than ever” for the FTC to protect consumers from the consequences of such deals, the lawmakers figure. Though the companies plan to sell certain assets to clear antitrust hurdles, those castoffs might not be enough to protect consumers, they wrote. 

The senators are worried about the mergers’ effect on pharma innovation, and they believe the merged companies could have more power in negotiations with payers. AbbVie is planning $1 billion in R&D cuts to pay off merger debt, they wrote.

“If these mergers reduce innovation, competition and patients will suffer,” the senators wrote. 

RELATED: Hey, FTC, unions say: AbbVie-Allergan deal needs close look after 'anticompetitive' history 

The senators' letter follows a similar missive from consumer groups and unions that asked the FTC to pay close attention to the AbbVie and Allergan merger. Already, the agency has forced Celgene to sell its blockbuster immunology drug Otezla to clear the regulatory bar for its BMS merger. Previously, Takeda had to offload some products to close its $62 billion Shire buyout. 

Meanwhile, the FTC seems to be taking an extra-close look at Roche’s proposed Spark Therapeutics buyout. The deal was originally set to close in the second quarter of 2019, but thanks to increased scrutiny, Roche has extended its deadline several times, most recently earlier this month. 

RELATED: Could FTC scrutiny of the Roche-Spark merger scuttle future pharma deals? Analysts are fretting  

Analysts have raised questions about the FTC's prolonged look at the deal. As a result of the antitrust worries, dealmakers could have second thoughts about pulling the trigger on deals down the road, according to a recent Bloomberg survey