Antitrust regulators are assessing the potential for:
- Reduced future competition among drugs that are currently at early stages of development
- Foreclosure of competition through bundled rebates
- Foreclosure of competition by limiting access to licensable technology and R&D
- Reduction in R&D effort—e.g., killer acquisitions
- Monopsony power in the labor market for highly specialized R&D personnel
Cornerstone Research and its affiliated experts have a deep understanding of the relevant market structure and the competitive interaction between market participants that allows us to address these issues.
Amgen Inc.’s Acquisition of Horizon Therapeutics plc
Retained by Cravath, Swaine & Moore
 Darius Lakdawalla |
The Federal Trade Commission (FTC) filed a lawsuit seeking to block Amgen Inc. (Amgen)’s proposed $28 billion acquisition of Horizon Therapeutics plc (Horizon). The FTC alleged that the acquisition would enable Amgen to leverage its top-selling drugs to foreclose potential future rivals to Horizon’s two rare-disease drugs by offering bundled rebates to payers and pharmacy benefit managers.
Counsel for Amgen retained Darius Lakdawalla of the University of Southern California to analyze the FTC’s claims and assess the analyses of the FTC’s experts. Professor Lakdawalla described the nature of price competition in the pharmaceutical industry and assessed Amgen’s ability and incentives to engage in the alleged leveraging behavior. |
Entrenching and Leveraging Market Dominance in the 2023 Merger Guidelines: Insights from Amgen/Horizon
Coauthored by Darius Lakdawalla, Jamie Lee, and Ana McDowall
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In an article published by The Antitrust Source, Dr. Lakdawalla with James Lee and Ana McDowall of Cornerstone Research explore relevant factors in the Amgen/Horizon merger challenge as an illustration of the analytical framework for the theory of leveraging market dominance via bundling in the new Merger Guidelines.
The Agencies’ new Merger Guidelines (December 2023) include some novel theories, such as the theory in Guideline 6 of leveraging market dominance in one market into another market by linking the sale of products in the two markets. Guideline 6 does not provide an analytical framework for evaluating competitive harm under this theory of leveraging market dominance into another market. |
The Impact of Pharmaceutical M&A on Innovation
Coauthored by Penka Kovacheva, Maria Salgado, Anca Cojoc, and Lorenzo Cattivelli
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The pharmaceutical industry often uses mergers and acquisitions strategically to strengthen market positions, expand product portfolios, access new technologies, and enhance innovation capabilities. Regulators are increasingly focusing on the impact of pharmaceutical mergers on innovation, with new merger guidelines issued by the U.S. Justice Department and Federal Trade Commission signaling a more expansive scrutiny of mergers.
In an article published by Concurrences Competition Law Review, the authors examine existing academic literature on the impact of pharmaceutical mergers and acquisitions and identify remaining gaps. |
Our Curious Amalgam: How Do We Measure Innovation?
ABA Antitrust Law Section podcast interview with Penka Kovacheva
 Penka Kovacheva |
Penka Kovacheva discussed the impact of M&A on innovation in the pharmaceutical industry during a podcast hosted by the American Bar Association (ABA).
Dr. Kovacheva spoke with the hosts of the ABA Antitrust Law Section podcast, Our Curious Amalgam, about her recent coauthored article published in Concurrences Competition Law Review, “The impact of pharmaceutical M&A on innovation: Insights from the literature and gaps remaining.” |
2024 ABA Antitrust in Healthcare Conference
ABA conference panel moderated by James Lee
 James Lee |
James Lee moderated a panel of competition experts to discuss “New Competition Theories in Life Sciences Mergers” during a two-day ABA conference in Arlington, VA. Panelists addressed the novel theories of harm that US merger enforcement agencies are using to challenge life science mergers. Speakers discussed these theories, their relevance in recent cases (such as the Amgen/Horizon merger), and economic considerations and analyses to evaluate them. |