With drug shortages in the U.S. not greatly improving, the Federal Trade Commission and the Department of Health and Human Services announced Wednesday that they are issuing a request for information to look at different groups involved in generic drug supply chains and evaluate how they may be contributing to persistent shortages.
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Following the regulator’s administrative complaint and threat of a lawsuit in federal court, Sanofi has decided to terminate its licensing deal with Maze Therapeutics to avoid a long litigation process.
With the settlement of a big acquisition behind them and a strong portfolio of therapeutics that continues to expand, hopes for smooth sailing are on the horizon.
“Competition in this market is necessary to protect patients from higher health care prices that could be passed on if the cost of marketing health care products increases due to reduced competition. The FTC contends the deal would also reduce innovation in this emerging industry, potentially harming patients by preventing doctors and other health care practitioners from learning about useful pharmaceutical products,” the FTC states.
The companies have filed their own suit against the Federal Trade Commission, claiming the FTC’s attempt to legally block their $28 billion merger is unconstitutional.
The news comes months after activist investor Carl Icahn tried to place three of his representatives on Illumina’s board ahead of the company’s annual shareholder meeting last month. In his pitch, Icahn pointed to deSouza’s and the incumbent board’s failure “to take actions to maximize value for the company’s stockholders.”
The Federal Trade Commission’s lawsuit takes an unusual strategy, according to legal experts, raising concerns and uncertainties in the biopharma industry.
San Diego-based Illumina is arguing that the FTC “violated due process by depriving Illumina and Grail of a fair proceeding before an impartial tribunal,” according to the filing in the U.S. Fifth Circuit Court of Appeals.
Furthermore, the FTC’s complaint, unsealed late Tuesday, expresses concern about deals struck between drug companies that give discounts to pharmacy benefit managers and insurers in return for making their medicines easier to get for their customers.