FTC Approves GlaxoSmithKline After Divestitures
The FTC approved the merger yesterday of British drug companies Glaxo Wellcome PLC and SmithKline Beecham PLC after the two completed a series of divestitures designed to ensure competition in drug markets the companies shared, the Philadelphia Inquirer reports. The $74 billion merger, which comes "[a]fter months delays," is set to be reviewed by the British High Court tomorrow, and the merger "is expected to be final Dec. 27, when trading in the new company is scheduled to begin" (Warner, Philadelphia Inquirer, 12/19). The pharmaceuticals that SmithKline sold in order to gain FTC approval include the anti-herpes drug Famvir, the anti-nausea drug Kytril and the cold sore drug Denavir. Glaxo said it "will divest the trademark rights for its blockbuster ulcer drug Zantac 75 ... to prevent overlap" with SmithKline's Tagamet heartburn medicine (Srinivasan, AP/Orlando Sentinel, 12/18). The FTC also examined the company's "pipelines to find potential antitrust problems" (Philadelphia Inquirer 12/19).
Richard Parker, director of the FTC's bureau of competition, said, "The proposed divestitures will lead to continued competition in these critically important pharmaceutical markets," and the government's consent order also "will ensure that competition occurs in the future in the markets where pharmaceutical products are not currently available" (AP/Orlando Sentinel, 12/18). The FTC did not, however, require the companies to divest smoking-cessation products, but said "it would continue to review the effects of the merger" on this market (Philadelphia Inquirer 12/19). If it is granted final approval, the new firm -- called GlaxoSmithKline -- would be the second-largest drug maker in the world, trailing only Pfizer. In terms of market share, however, the new company would be the world's largest, commanding 7% of the global market (American Health Line, 12/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.