EU Conditionally Approves Mylan and Pfizer Upjohn Merger

Compiled by S. Li

On April 22 local time, the European Commission announced its approval of the merger between Pfizer’s Upjohn business and Mylan. As a condition of approval, certain generic drug assets of Mylan will be divested.

The merger of the two companies was initially proposed in July 2019 but subsequently faced dual challenges from antitrust laws and the COVID-19 pandemic. Antitrust regulators typically focus most closely on whether competing assets remain available for sale in the combined portfolio of pharmaceutical manufacturers post-merger, as their absence could lead to market monopolization. Late last month, foreign media reported that Mylan and Pfizer had agreed to make concessions on certain review items to address antitrust concerns.

Related Reading:Pfizer and Mylan Make Concessions as Merger Push Continues!

Recently, the European Commission finally completed its investigation into this merger and approved its implementation. Margrethe Vestager, Executive Vice-President for Competition Policy of the EU, stated: “The EU will ensure that this merger does not harm competition and preserves competitive access to certain generic medicines for the healthcare sector and European citizens.”

It is reported that the European Union’s investigation focused on the generic drug market supplied to hospitals and pharmacies. Within this sector, Mylan and Upjohn had overlapping portfolios in therapeutic areas including cardiovascular, genitourinary, musculoskeletal, nervous system, and sensory organs. The investigation found that most products supplied by Mylan and Upjohn did not raise competition concerns. However, in certain countries and regions, due to the strong market positions of the two companies and the limited number of significant competitors, there were concerns about local market competition for 36 small-molecule drugs, including atorvastatin.

To address these issues, Mylan and Upjohn proposed divesting Mylan’s business in the relevant markets—including valid distribution licenses, contracts, brands, and short-term manufacturing and supply arrangements—to one or more suitable purchasers, covering certain generic medicines in 20 countries across the European Economic Area and the United Kingdom.

The Committee also investigated the vertical relationship between Mylan and Upjohn regarding the authorized transfer of upstream supplies of active pharmaceutical ingredients and generic drugs. It ultimately concluded that there were no concerns in this regard that would raise anticompetitive alerts.

When the two companies previously announced their merger, it was revealed that Mylan possessed a portfolio of more than 7,500 products, including biosimilars, generics, branded pharmaceuticals, and over-the-counter (OTC) medicines. Additionally, Mylan provided active pharmaceutical ingredients (APIs) and held advantages in manufacturing and supply chain management. Upjohn owned a series of iconic branded medicines in the field of non-communicable diseases, such as Lipitor, Celebrex, and Viagra, and demonstrated strong commercialization capabilities. The integration of both companies’ product portfolios and business capabilities is expected to yield greater potential advantages. According to industry reports, this merger was driven by the need to address intensified competition in the generic drug market spurred by Indian manufacturers.

The deal, valued at approximately $63 billion, was originally expected to close in early this year. However, due to the global panic triggered by the coronavirus pandemic, which slowed the review process, Mylan announced last month that the merger would be delayed until the second half of this year.

Reference Source:

1、EU approves merger of Pfizer off-patent unit and Mylan

2、Mergers: Commission approves the merger of Mylan and Pfizer's Upjohn division, subject to conditions