In the United States, mergers and acquisitions are reviewed by the Department of Justice (DOJ) or the Federal Trade Commission (FTC). These agencies are also responsible for imposing and enforcing appropriate remedies to maintain a competitive market. Parties seeking to merge must receive approval from the relevant agency with jurisdiction over the industry. The DOJ and FTC divide review by subject matter, based on each agency’s previous experience and expertise. Mergers between pharmaceutical companies are reviewed by the FTC, which has developed principles and patterns for evaluating the effects of transactions involving prescription drugs. The FTC division known as Mergers I is responsible for examining transactions in healthcare-related industries, including pharmaceuticals.2 The FTC also has a separate Health Care Division, which investigates business practices of health professionals, pharmaceutical companies, institutional providers and insurers, in addition to reviewing transactions involving healthcare products and services.3 Pharmaceuticals are also regulated by the US Food and Drug Administration (FDA), and the FTC’s review accounts for the complexity of this highly regulated industry. This chapter contains three main sections. Section II provides an overview of the FTC’s general review process, including the steps merging firms generally must follow and a brief discussion of the FTC’s view of the relevant geographic and product markets. Section III discusses merger remedies in the pharmaceutical sector, and what parties can expect from an FTC consent decree. Section IV discusses recent developments in US merger review in the pharmaceutical sector, including potential changes to FTC policy towards certain divestiture remedies.
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