FTC grants conditional approval for Mylan’s acquisition of Upjohn: What this means for the pharma industry

The U.S. Federal Trade Commission (FTC) has granted conditional approval for Mylan‘s acquisition of Upjohn, Pfizer’s off-patent branded and generic medicines business. This strategic merger aims to create a new global pharmaceutical entity, combining Mylan’s established generic portfolio with Upjohn’s renowned branded medicines. While the deal was first announced in July 2019, it has now cleared a significant regulatory hurdle. The FTC’s approval is contingent on specific conditions being met to ensure that the merger doesn’t compromise competition in the pharmaceutical market.

What Does the Mylan and Upjohn Merger Mean for the Pharma Industry?

The acquisition of Upjohn by Mylan marks a major shift in the pharmaceutical landscape. This merger is designed to form a new company called Viatris, which will house a portfolio of over-the-counter and prescription medicines. The combination of Mylan’s generic drugs and Upjohn’s branded products will help Viatris deliver affordable and accessible healthcare solutions on a global scale.

The move comes at a time when pharmaceutical companies are facing increased pressure to reduce drug costs and improve access to medications. By joining forces, Mylan and Upjohn are aiming to bolster their market position and unlock significant value for their shareholders, employees, and customers. However, the FTC’s approval of the merger comes with stipulations intended to preserve competition and prevent monopolistic practices.

FTC’s Conditional Approval and Its Impact on Competition

To address concerns over potential competition issues in the generic drug market, Mylan and Pfizer’s Upjohn have agreed to divest certain assets. The FTC expressed concerns that the merger could affect competition in up to 10 generic drug markets. As part of the settlement, the companies will sell the rights and assets related to several key drugs, including phenytoin chewable tablets, amlodipine besylate/atorvastatin calcium tablets, and spironolactone HCTZ tablets, among others.

Additionally, Mylan has agreed to sell its rights to eplerenone tablets, further addressing regulatory concerns. The divestitures are seen as a necessary step to maintain a competitive landscape in the generic drug industry, preventing the creation of a dominant player that could potentially stifle competition and inflate prices.

What Is the Future of Viatris and Its Stakeholders?

Following the merger, Pfizer will receive $12 billion as part of the spin-off of Upjohn into Viatris. The transaction will be an all-stock deal, with Mylan shareholders receiving one share of Viatris for every Mylan share they hold. Upon completion of the deal, Pfizer will own a 57% stake in Viatris, while Mylan’s shareholders will hold the remaining 43%.

For Pfizer, the creation of Viatris is a strategic move that aligns with its focus on cutting-edge medicines and innovations that address unmet medical needs. Pfizer’s Chairman and CEO, Dr. Albert Bourla, expressed optimism about the new company’s potential to create value for both shareholders and the global healthcare community. He emphasized that the merger would allow Pfizer to sharpen its focus on innovative treatments and breakthroughs, particularly in areas such as cancer, immunology, and rare diseases.

Expert Insights into the Future of Viatris

The formation of Viatris signals a shift towards a more diversified pharmaceutical company. The combined entity will have a broad portfolio, with a focus on generics, over-the-counter drugs, and specialty medicines. This diversified approach is crucial as pharmaceutical companies seek to weather the uncertainties of patent expirations and the pressures of price control regulations worldwide.

Experts believe that Viatris’ ability to offer affordable medications, especially generics, will be key to its long-term success. As health systems around the world continue to struggle with rising drug costs, Viatris may find itself well-positioned to lead the charge in affordable healthcare solutions. However, it will need to navigate the complex regulatory environment and ensure that its competitive edge does not come at the expense of market fairness.

What’s Next for Mylan, Pfizer, and Viatris?

As the FTC has granted conditional approval for Mylan’s acquisition of Upjohn, the merger is poised to reshape the pharmaceutical industry. The formation of Viatris marks the beginning of a new chapter for both Mylan and Pfizer, bringing together strengths from both companies to create a powerhouse in the healthcare sector. While the FTC’s conditions ensure that competition remains intact, the new entity will need to address the evolving demands of the global healthcare market.