Jul 14, 2015 3 min read

Consumer advocacy groups Tuesday called on the Federal Trade Commission to block Teva Pharmaceuticals’ hostile bid to acquire Mylan B.V.

In a letter to the FTC, the groups, which include Consumers Union, Consumer Federation of America, US PIRG, Consumer Action, Consumer Watchdog, Public Citizen and National Center for Health Research, stated that if allowed to occur, the takeover would combine the top two largest generic drug companies, creating a behemoth that could dominate the generic pharmaceutical industry.

According to the groups, such a merger would run counter to public interest and could: increase generic and specialty drug prices, exacerbate generic drug shortages and reduce the competitive drive within the industry to develop new generic drugs.

“Teva’s takeover of Mylan is a bad deal for consumers,” said Lisa Swirsky of Consumers Union. “The generic pharmaceutical industry has already seen marked consolidation over the past several years. If these two companies are now allowed to merge, consumers are going to face even higher costs and further reduced access to life-saving drugs.”

Linda Sherry of Consumer Action said a merger of the two companies “would dramatically alter the generic drug marketplace. The extensive harms to competition and consumers can’t be stopped by divesting a specific lines of generic drugs. We see no path forward that would make this merger okay.”

The letter explained the merger would harm consumers in at least three ways, most notably with increases in generic and specialty drug prices. The writers stated that from July 2013 to July 2014, more than half of all retail generic drugs experienced price increases, with generic manufacturer consolidation playing a significant role in the increased prices. They said if the Teva-Mylan merger is approved, that would only get worse, noting the combined entity would have more than double the market share of the next-largest generic manufacturer.

The consumer group also said a merger would bring increases in drug shortages, stating consolidation within the drug manufacturing industry leads to fewer production facilities and manufacturing lines to produce needed drugs. According to the writers, of the 70 drugs the FDA lists in short supply, three are made by both Mylan and Teva, while five other drugs are produced solely by Teva and four additional drugs are produced solely by Mylan.

“Teva’s hostile bid presents a disastrous scenario for consumers and the entire generic drug industry,” said Jesse Ellis O’Brien on behalf of US PIRG. “Generic drugs are responsible for more than $1.5 trillion in savings since 2004. Now, more than ever, we need a robust and competitive generic drug marketplace that allows consumers to achieve savings and adds stability to our nation’s health care system.”