The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
11 Attorneys General Seek Probe Into Meatpacking Industry. The attorneys general for 11 Midwestern states urged the Justice Department on Tuesday to pursue a federal investigation into market concentration and potential price fixing by meatpackers in the cattle industry during the coronavirus pandemic. In a letter to U.S. Attorney General William Barr, the state attorneys general noted that the domestic beef processing market is highly concentrated, with the four largest beef processors controlling 80 percent of the industry. “Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis,” they wrote.
AbbVie wins U.S. antitrust approval to buy Allergan. Drugmaker AbbVie Inc. has won U.S. antitrust approval to buy Botox maker Allergan, a blockbuster $63 billion deal when it was announced last year, the companies said on Tuesday. AbbVie, which has been under pressure to diversify its portfolio, said in June 2019 that it would acquire Allergan in a deal that gives AbbVie control over the lucrative wrinkle treatment Botox and buys time to seek new growth before its arthritis treatment Humira loses U.S. patent protection in 2023. A four-week supply of Humira, the world’s best-selling medicine, has a list price of about $5,174 or more than $60,000 for a year. Its sales were $4.70 billion for the most recent quarter despite declines outside the United States, where it has begun facing competition from cheaper biosimilar versions.
Generic Drug Maker Admits to Fixing Prices for Cholesterol Medication. The Justice Department said on Thursday that a top generic drug maker admitted to fixing prices of a popular cholesterol drug and agreed to pay $24.1 million, as part of the department’s broad crackdown on price fixing and bid rigging in the generic drug market. Apotex settled charges with the Justice Department that it worked with other drug companies to inflate and maintain the price of the cholesterol drug, pravastatin, from 2013 to 2015. “When the makers of those medications conspire to raise prices for profit, the most vulnerable among us suffer,” Makan Delrahim, the head of the Justice Department’s antitrust division, said in a statement. “Now, more than ever, we recognize and appreciate the importance of lifesaving medications.”
Textbook companies Cengage, McGraw-Hill scrap merger. Cengage and McGraw-Hill, the No. 2 and 3 largest U.S. college textbook companies, terminated their merger agreement under pressure from U.S. and British antitrust enforcers. Cengage said the deal, announced in May 2019, was scrapped “by mutual agreement due to a prolonged regulatory review process and the inability to agree to a divestitures package with the U.S. Department of Justice.” McGraw-Hill simply said closing conditions could not be satisfied. The deal, which would have created a company worth about $5 billion, came at a time when college textbook prices were stable or declining slightly after two decades of rising sharply, according to U.S. government data. McGraw-Hill is owned by Apollo Global Management LLC (APO.N).
Edited by Gary Malone