FTC settles with Amgen over $27.8 billion takeover of Horizon Therapeutics

Amgen will also have to get approval from the FTC to acquire any products that treat those diseases.

As part of the deal, attorneys general for California, Illinois, Minnesota, New York, Washington, and Wisconsin have also agreed to dismiss their federal suits seeking to block the merger.

The deal will be effective for 15 years after it is finalized, and Amgen will be required to submit annual compliance reports during that period. A monitor will be appointed by the FTC to oversee the Amgen’s compliance.

“Consolidation in the pharmaceutical industry has given companies the power and incentive to engage in exclusionary rebating practices, which can lead to sky-rocketing prices on essential medications,” said Henry Liu, Director of the FTC’s Bureau of Competition, in a statement. “Today’s proposed resolution sends a clear signal that the FTC and its state partners will scrutinize pharmaceutical mergers that enable such practices, and defend patients and competition in this vital marketplace.”

The FTC had sued to block the deal in May, arguing that the deal would enable Amgen to exploit its large portfolio drugs through discounts to insurers in order to favor other drugs it has patented.

The practice of cross-market rebating, the agency argued, hampers competition by blocking smaller rivals from competing in markets to treat certain diseases like thyroid eye disease and chronic reactory gout.

The FTC argued in its May complaint that Amgen’s “history” suggests that following the acquisition, it would likely condition rebates to insurance companies on their agreeing to disfavor potential competitiors to Horizon’s Tepezza or Krystexxa.

Shares of Horizon Therapeutics rose 2.5% in early trade Friday, while Amgen stock was up about 1%.