FTC, DOJ Finalize Merger Guidelines that Could Impede Healthcare Deals

The Federal Trade Commission (FTC) and Department of Justice (DOJ) released new merger guidelines that have implications for the life sciences industry. The new guidelines may give regulators more ammunition to go after vertical and cross-market M&A that has historically been more difficult to challenge. Private equity “roll-ups” of multiple companies may also face heightened scrutiny.

The announcement reflects the agencies’ proposal earlier this year and raises significant concerns given the unique role that mergers & acquisitions play in innovation and the development of novel therapies. The guidelines dramatically expand the number and type of transactions that the agencies will consider presumptively unlawful.

The new Guidelines replace the 2010 Horizontal Merger Guidelines and the 2020 Vertical Merger Guidelines. Their release coincides with the agencies’ aggressive enforcement rhetoric, [1] substantial increases in their funding, [2] and pending Hart-Scott-Rodino (HSR) Act premerger notification requirements that are likely to substantially increase burdens on filing parties. [3] The Guidelines apply to all transactions and all industries, but the agencies have indicated that they are especially interested in the life sciences, healthcare, technology, and private equity sectors.

MichBio, along with many other partners across the U.S., will continue to engage federal officials and help them understand how a reduction in the ability of large companies to access disruptive biomedical innovation will have on patient access.

For a statement on this issue from the Partnership for the US Life Science Ecosystem (PULSE), of which MichBio is a participant, click here.