EC Approves Mylan-Pfizer Merger 'With Conditions'

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The proposed multibillion-dollar merger of Pfizer (NYSE:PFE) (New York, New York) and Mylan's (NASDAQ:MYL) (Canonsburg, Pennsylvania) generics drugs businesses into a new company has received a conditional green light from the European Commission (EC).

The merger, which will create a new company with estimated revenues of $19 billion to $20 billion, won antitrust clearance from the EC as long it complies with certain conditions. Mylan's merger, which will be delayed by the COVID-19 pandemic, will be with Upjohn, the Pfizer business division which deals in off-patent branded and generic established medicines. The decision is conditional on "the divestment of Mylan's business for certain generic medicines," the EC found. Mylan is one of the top five generic suppliers in the European region and, with a workforce of 35,000 people, has a portfolio of more than 7,500 marketed products, including antiretroviral therapies used by more than 40% of people being treated for HIV/AIDS globally. Upjohn offers 20 of the industry's leading branded products and has 11,500 employees in commercial and manufacturing roles. For additional information, see August 5, 2019, article - Pfizer/Mylan Merger Creates Generic Drugs Giant.

EC Executive Vice President Margrethe Vestager, responsible for competition policy, said: "Ensuring that patients and hospitals have access to medicines at fair and competitive prices, as well as ensuring security of supply, is always a key priority which resonates even more strongly in the current challenging context. Our decision ensures that the merger between Mylan and Upjohn does not harm competition, thus preserving competitive access to certain genericised medicines for national health services and European citizens."

The Commission's investigation focused on the market for genericised medicines, which are sold to pharmacies and hospitals. Mylan and Upjohn overlap in various therapeutic areas such as cardiovascular, genito-urinary, musculoskeletal, nervous system and sensory organ treatments.

The Commission's investigation found that "no competition concerns arise for the majority of the products supplied by both Mylan and Upjohn." However, in some countries and for some molecules, the Commission found the transaction would raise competition concerns because of the strong position of the two companies and the limited number of significant competitors on the market. The companies have made commitments to the EC to address its concerns. Mylan and Upjohn have offered to divest to one or more suitable purchasers, Mylan's business in the relevant markets, including the applicable marketing authorisations, contracts and brands, as well as transitory manufacturing and supply arrangements. These include certain generic medicines across 20 countries throughout the EEA and the U.K.

"We are pleased to receive the European Commission's approval of the combination of Mylan and Upjohn, conditioned upon the completion of the sale of certain of Mylan's products in Europe," Mylan stated. "We appreciate the opportunity to have worked collaboratively with the EC on this approval, and the scale and scope of these required product divestitures are substantially in line with Mylan's previously stated expectations. This is a significant milestone, and we are committed to fully satisfy the EU's conditions, and expect to have the divestitures complete by the timely close in the second half of 2020."

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