Consumer groups write FTC in opposition of Teva’s potential Mylan purchase

WASHINGTON — A collection of eight consumer groups have written to Federal Trade Commission chair Edith Ramirez in opposition of the ongoing potential merger between pharmaceutical companies Teva and Mylan — a merger the latter company has rebuffed. The letter is co-signed by Consumers Union, Consumer Action, Consumer Watchdog, the Consumer Federation of America, Public Citizen, Community Catalyst, the U.S. PIRG  and the National Center for Health Research. 

The groups are concerned largely with the impact that a merger between Teva and Mylan —which combined produce about 25% of generic drugs on the market — would have on consumers, in particular the risk of higher prices.

“Teva’s takeover of Mylan would effectively be a four-to-three merger, creating a single entity with more than double the market share of the next-largest generic drug manufacturer,” the letter says. “An even more highly concentrated generic drug market would likely result in both unilateral and coordinated anticompetitive effects, including further price increases and a diminished competitive drive within the industry to develop new generic drugs.” 

The groups are also concerned that higher prices brought on by a merger and lack of competition has the potential to have a large negative effect on adherence rates, something that already costs an estimated $100 billion to $289 billion in physician visits and hospitalizations. 

“Where consumers are faced with increasing drug costs, they often skip medication doses, with failure in medication adherence leading to worsening health problems21 and substantial costs to the American health care system.”

Additionally, the letter outlines concerns that a merger would worsen drug shortages, given that Teva and Mylan combined make 12 of the 70 drugs that the Food and Drug Administrations lists as having shortages. If Teva were to purchase Mylan, the consumer groups say, it would cut down on the facilities producing drugs that are already in short supply.

“Along with exacerbating the current drug shortages of these medications, a merger between the two largest generic manufacturers would likely eliminate more manufacturing facilities, leading to reduced production and creating other shortages of generic and specialty drugs,” the letter says. 

It also follows logic that Mylan’s CEO has expressed as part of the company’s hesitance to enter into a deal with Teva, namely that a merger would violate antitrust laws. 

“We believe you will conclude that the merger would substantially lessen competition in violation of the antitrust laws, and should be blocked,” the letter says.