FTC tries to block Horizon deal

The Federal Trade Commission (FTC) is attempting to block Amgen's $27.8 billion purchase of Horizon Therapeutics. In their view the deal would stifle competition and delay the development of new treatments. Horizon has a near-monopoly on medications for eye thyroid disease and refractory gout. Amgen might increase drug prices to get a return on their huge investment.

This is the first time the FTC has sued to block a pharma deal since 2009. Under Biden, the FTC has been staffed with young socialists who have earmarked the healthcare sector for further scrutiny.

The Food and Drug Administration (FDA) is very conservative at approving new drugs. This results in lots of consolidation in the sector as bigger companies gobble up smaller ones with approved products. This results in big premiums being paid, and a subsequent drive for high margins. Drug development is hard, and getting FDA approval is even harder, which is why Amgen went after Horizon.

I'm a proponent of letting free markets to do their thing but because the FDA is so conservative, it stifles innovation. Maybe they are the problem? For Amgen, the deal falling through could be a good thing in the short term. In many deals the acquirer over pays, especially when the company being bought is already listed. Both Amgen and Horizon are still optimistic they can get the deal through.