August 15, 2022

Antitrust + Competition Life Sciences Quarterly Update Q2 2022

Although the second quarter did not feature any life sciences enforcement action by the FTC, there was plenty of news in and around the space. The FTC held a detailed “virtual workshop” as part of its pharmaceutical merger task force and news emerged of a potential Merck-Seagen deal that could set up an interesting test of the FTC’s new enforcement priorities. Finally, the FTC’s recent complaint seeking to stop the proposed Meta/Within transaction offers potential insight into how the new Democratic majority might approach a large pharmaceutical transaction.

The Pharma Merger Task Force Presses Forward

Back in March 2021, the FTC and DOJ, along with U.S. Offices of State Attorneys General, Canada, EU and UK antitrust/competition agencies, launched the Multilateral Pharmaceutical Merger Task Force (Task Force). The expressed mission of the Task Force is to build a new approach to pharmaceutical mergers, and analyze and address competitive concerns that these mergers raise.

From June 14-15, 2022, the Task Force held a workshop to explore new approaches to enforcing antitrust laws in the pharmaceutical industry, gathering panelists from academia, government and policy institutions.1  While the proposals and arguments made by panelists do not themselves constitute the adoption of a new enforcement approach by the agencies, they suggest that significant changes may be on the horizon.

FTC Chair Lina Khan set the stage for the workshop by noting the “troubling” state of affairs in the pharmaceutical industry, observing in particular a history of significant price increases (20% per year over the last 10+ years), the prevalence of so-called “killer acquisitions” (acquisitions that are made for the purpose of shutting down potential or nascent competitors), minimal innovation by leading drug companies, and lawsuits against those same companies alleging illegal bundling and tying.

The panels, which addressed concentration, remedies, innovation, and conduct, struck similar notes, advocating stronger enforcement and significant changes to the agencies’ current practice for evaluating pharmaceutical mergers. Among other things, panelists supported (i) the institution of a presumption of competitive harm in transactions involving large pharmaceutical companies that would shift the burden to the merging firms to show that merger- specific efficiencies exist, (ii) consideration of overall firm size and drug portfolios as a whole, in addition to discrete overlaps, to account for potential cross-market effects, (iii) moving away from the historically-favored policy of settling all challenged pharmaceutical mergers with divestitures, (iv) establishing a system of post-merger review to ensure that past decisions, including remedies, had the intended effect, and to continuously monitor R&D levels and patent output post-merger, and (v) factoring in prior bad acts when deciding whether to let a merger proceed and to determine remedies.

While the Task Force’s work remains ongoing, these hearings continue to give strong indications of the overall direction of the effort, and the potentially significant changes for antitrust enforcement going forward.

Is FTC’s Complaint in Meta/Within an Ominous Sign for Big Pharma?

On July 27, 2022, the FTC filed a complaint in the U.S. District Court for the Northern District of California seeking to enjoin Meta Platforms, Inc.’s proposed acquisition of Within Unlimited, Inc.2  As described in more detail in our Antitrust + Competition Technology Quarterly Update Q2 2022, the FTC’s complaint alleges that the acquisition constitutes “one more step along [Meta’s] path toward dominance” of the virtual reality space, and poses a “reasonable likelihood of substantially lessening competition in the market for VR dedicated fitness apps.” (Complaint at 8)

The FTC’s theory is based on a number of critical allegations, including what is commonly referred to as “perceived potential entry,” or the perception by Meta’s competitors that it was likely to enter the relevant product market on its own.  The FTC argues that “[i]n light of Meta’s economic characteristics, size, resources, capabilities, advantages, and incentives, it would be eminently reasonable for a VR dedicated fitness app market participant to perceive Meta as a potential entrant.” (Complaint at 106). In support of this, the FTC cites Meta’s standing as a “massive, wealthy company with extensive control over and experience in various aspects of the VR industry,” with recent expansion into certain VR app markets through internal development. (Complaint at 107)

Although portions of the complaint remain under seal, it appears to be the case from the publicly available version that the FTC’s case hinges less on any actual intention by Meta to enter this space than the perception of Meta’s competitors (and the FTC) as to Meta’s intentions and capacity to enter based on its size, resources and activities in related areas.

It is not difficult to see potential analogs to such a theory in the pharmaceutical space. “Big Pharma” features several large companies with extensive resources and experience with innovation across different therapeutic areas and scientific platforms. Using the FTC’s theory as articulated in the Meta/Within complaint, a company’s choice to enter through acquisition of clinical or preclinical pipeline — rather than organically — could be viewed as anticompetitive. Further, its presence in a given clinical area, when considered with its overall size and resources, could contribute to a view by its competitors that it is a “perceived potential entrant” into any number of product markets.

For these reasons, it is worth keeping a close eye on the Meta/Within case, both for more insight into the factual support for the FTC’s allegations, and for the judicial reception to these theories.

Transactions and Trends We Are Monitoring

  • Pfizer’s Potential Acquisition of Global Blood Therapeutics: It is reported that Pfizer is close to acquiring the Global Blood Therapeutics for $5.4 billion.  Global Blood Therapeutics is a promising small pharmaceutical company with multiple assets in sickle cell disease, including Oxbryta launched in the U.S. in 2020.  This would be the second high profile transaction in front of the FTC regarding sickle cell disease.  
  • CSL’s Proposed Acquisition of Vifor: At the time of our previous update, we had reported that the FTC appeared to be investigating the proposed CSL-Vifor transaction over the horizontal overlap in the clinical pipelines of the two companies in sickle cell disease, and generally between Vifor’s leading iron-deficiency hematology franchise and CSL’s broad blood-plasma portfolio. The transaction still has not closed.
  • Rumored Merck-Seagen Transaction: Rumors have emerged about negotiations between Seagen, Inc. (Seagen) and Merck & Co (Merck).3 This deal could present interesting issues for the FTC, particularly in light of public comments from both the Task Force and FTC leadership. Merck has an enviable oncology franchise, including its checkpoint inhibitor Keytruda, indicated for a number of solid tumors and lymphomas. The two companies have programs with overlapping indications but Seagen’s antibody-drug conjugates (ADC)4 technology could be scientifically synergistic with Merck’s platform. The press coverage also has pointed at questions around the potential impact of the acquisition on Seagen’s existing collaboration with Bristol Myers Squibb.5 The deal is said to be potentially worth more than $40 billion,6 which would make it the largest pharmaceutical merger since AbbVie’s $63 billion acquisition of Allergan in 2019. While that transaction ultimately cleared with divestitures, Democratic Commissioners Chopra and Slaughter (then in the minority) issued vigorous dissents. 

[2]FTC v. Meta Platforms, Inc., et al, Case 3:22-cv-04325, Complaint for a Temporary Restraining Order and Preliminary Injunction Pursuant to Section 13(b) of the Federal Trade Commission Act, July 27, 2022,
[3]As Merck closes in on Seagen, the FTC nears a key test on pharma deals | BioPharma Dive (
[4]ADCs are designed to harness the targeting power of antibodies to deliver small molecule drugs to the tumor. This innovative approach to therapy offers meaningful efficacy while reducing side effects for patients. (see Antibody–Drug Conjugates (ADCs) and Other Technologies – Seagen)
[5]See Note 3.
[6]Merck is in talks to acquire Seagen in potential $40bn deal ( (; see also Merck nears $40B deal to buy Seagen: WSJ ( (
[7]FTC Approves Final Order Imposing Conditions on AbbVie Inc.’s Acquisition of Allergan plc | Federal Trade Commission (,,