Mylan battles against Teva takeover: US consumer groups oppose merger

Today, consumer advocacy groups including Consumers Union, Consumer Federation of America, US PIRG, Consumer Action, Consumer Watchdog, Public Citizen, and National Center for Health Research joined together to call on the Federal Trade Commission (FTC) to block Teva Pharmaceuticals’ hostile bid to acquire Mylan. If allowed to occur, the takeover would combine the top two largest generic drug companies, creating a behemoth that could dominate the generic pharmaceutical industry. Such a merger would run counter to public interest and could: increase generic and specialty drug prices, exacerbate generic drug shortages, and reduce the competitive drive within the industry to develop new generic drugs. The consumer groups have sent a joint letter to the FTC that details their concerns. The letter can be found here.

“Teva’s takeover of Mylan is a bad deal for consumers, ” said Lisa Swirsky of Consumers Union. “The generic pharmaceutical industry has already seen marked consolidation over the past several years. If these two companies are now allowed to merge, consumers are going to face even higher costs and further reduced access to life-saving drugs.””We are concerned that Teva’s takeover of Mylan would dramatically alter the generic drug marketplace. The extensive harms to competition and consumers can’t be stopped by divesting a specific lines of generic drugs. We see no path forward that would make this merger okay, ” said

Linda Sherry of Consumer Action.

The letter explained that the merger would harm consumers in at least three ways:

1) Increases in Generic and Specialty Drug Prices: From July 2013 to July 2014, more than half of all retail generic drugs experienced price increases, with generic manufacturer consolidation playing a significant role in the increased prices. If the merger is approved, that would only get worse. The combined entity would have more than double the market share of the next-largest generic manufacturer. Promoting low prices on generic and specialty drugs is of critical importance to consumers to encourage treatment adherence and patient recovery rates.

2) Increases in Drug Shortages: Consolidation within the drug manufacturing industry leads to fewer production facilities and manufacturing lines to produce needed drugs. Of the 70 drugs that the FDA lists in short supply, three are made by both Mylan and Teva, while five other drugs are produced solely by Teva and four additional drugs are produced solely by Mylan. Along with exacerbating current drug shortages, a merger between the two largest generic manufacturers will likely eliminate more manufacturing facilities, leading to reduced production and creating shortages for other generic and specialty drugs.

“Teva’s hostile bid presents a disastrous scenario for consumers and the entire generic drug industry, ” said Jesse Ellis O’Brien on behalf of US PIRG. “Generic drugs are responsible for more than $1.5 trillion in savings since 2004. Now, more than ever, we need a robust and competitive generic drug marketplace that allows consumers to achieve savings and adds stability to our nation’s healthcare system.”

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