FTC v Amgen: The Economics of Bundled Discounts, Part Two
The Federal Trade Commission (FTC) recently announced that it would sue to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The challenge represents a landmark in the history of pharmaceutical-industry antitrust enforcement, as the industry has largely been given license to engage in permissive mergers and acquisitions of smaller companies without challenge.
In Part One, I reviewed the basic structure and function of the pharmaceutical industry, as well as the theory of harm that the FTC is bringing. In this part, I take a much deeper dive into the economic literature to determine whether the FTC’s theory of harm is likely to hold up in court and whether the commission has picked the right forum in which to bring its claims.