Commission grants clearance to generic pharmaceutical merger

Commission grants clearance to generic pharmaceutical merger

12 December 2014

The Commerce Commission has granted clearance to Mylan Inc. to acquire the Established Pharmaceuticals Division of Abbott Laboratories, Inc.

In New Zealand, Mylan and Abbott import and wholesale supply a range of generic pharmaceutical products. There is limited overlap in the products they supply; however, Mylan and Abbott are the only two suppliers of verapamil.

Verapamil is a prescription medicine that is used in the treatment of hypertension and angina. The supply of verapamil in New Zealand is currently fully subsidised by Pharmac.

“The Commission is satisfied the acquisition will not, or would not be likely to, substantially lessen competition in the market for the wholesale supply of verapamil,” said Commerce Commission Chair Dr Mark Berry.

“The merged firm is likely to face competition for the supply of verapamil at future tenders held by Pharmac. If faced with a price increase, Pharmac, as the sole funder of verapamil, is likely to have a degree of countervailing power.”

Clearance was granted only to the extent the acquisition would affect a market in New Zealand. A public version of the written reasons for the decision will be available shortly on the Clearances register.

Background
Mylan is a US-based global pharmaceutical company that supplies branded generic and specialty pharmaceuticals. In New Zealand, Mylan operates through its wholly-owned subsidiary, Mylan NZ Ltd, which distributes imported off-patent medicines as well as a range of prescription and over the counter medicines.

Abbott Laboratories is a global healthcare company that is, among other things, involved in the supply of a range of healthcare products including branded generic pharmaceuticals via its Established Pharmaceuticals Division. Abbott Laboratories operates in New Zealand through its wholly-owned subsidiary, Abbott Laboratories NZ Ltd, which is primarily involved in marketing and distribution activities.

The Pharmaceutical Management Agency (Pharmac) is responsible for the supply and funding of the vast majority of prescription medicines in New Zealand and it decides what medicines will be subsidised.

ENDS

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