The Dutch Authority for Consumers and Markets (ACM) recently reviewed its first merger between two pharmaceutical companies. In its conditional clearance of Aurobindo's acquisition of certain European Apotex assets, the ACM followed the European Commission's approach in assessing the merger's impact on competition. Companies will welcome the news that pharma mergers will be reviewed in a similar fashion, irrespective of whether the ACM or the European Commission conducts the review.
The deal, worth EUR 74 million, involved India's Aurobindo acquiring Canadian Apotex's commercial operations and some of its supporting infrastructure in Poland, Czech Republic, Spain Belgium and the Netherlands. In the Dutch market, Aurobindo predominantly supplies prescription drugs to pharmacies, whereas Apotex's focus is on over-the-counter retail sales through drugstores and supermarkets (a substantial portion of which is private label sales). This diverging focus of the respective businesses was an important factor in the ACM's assessment.
Typically, pharmaceutical transactions are assessed by the European Commission in view of the turnover associated with pharmaceutical product portfolios. However, the Aurobindo/Apotex deal did not meet the European thresholds and therefore had to be reviewed by the Dutch and Polish competition authorities. The ACM followed the EU's industry-specific framework of analysing pharmaceutical mergers. In line with the Commission's approach, the ACM analysed overlaps at the level of the molecule limited to specific forms. The Dutch regulator also analysed the parties' pipeline, contract manufacturing and outlicensing activities. The only drug which raised concerns was the diazepam (enema), because the companies were the only suppliers of this drug in the Netherlands. The parties' commitment to divest Apotex's diazepam (enema) product remedied the ACM's competition concerns.
The ACM focuses on the pharmaceutical industry as part of its key priorities in 2019.
This article was published in the Competition Law Newsletter of February 2019. Other articles in this newsletter: