One year ago, Spanish pharmaceutical manufacturer Grifols, S.A. acquired Talecris Biotherapeutics in a transaction valued at $3.4 billion. Today the US Federal Trade Commission announced it rewrote the merger, after the fact, to its own liking:
[This is] the latest FTC action taken to preserve competition and protect U.S. consumers from higher health care costs. It resolves FTC charges that Grifols’ proposed acquisition of Talecris would be anticompetitive and would violate federal antitrust laws. As part of the settlement, Grifols will sell the Talecris fractionation facility in Melville, New York, and Grifols’ plasma collection centers in Mobile, Alabama, and Winston-Salem, North Carolina, to Kedrion S.p.A. Kedrion is a manufacturer of plasma-derived products in Europe and other markets, and will be a new entrant in the U.S. plasma-derived products industry. Grifols also will manufacture three plasma-derived products for Kedrion for several years under a manufacturing agreement.
The FTC decided Kedrion should enter the market for “plasma-derived products,” and the Commission’s order effectively requires Grifols to actively subsidize its new competitor. Please note, the FTC does not claim Grifols acquired a monopoly through its merger with Talecris. To the contrary, for the three specific drugs identified in the Commission’s complaint, the combined firms hold market shares of less than 30% or less. There is also more than one remaining post-merger competitor in each market.
Nevertheless, the Commission said intervention was necessary because, “With fewer competitors in the market, those remaining could more easily work together through coordinated interaction to reduce supply and raise prices for consumers.” As always with antitrust, property rights are conditioned on the government’s ability to allege a hypothetical risk of a hypothetical action that might raise prices in the future.
Of course, any lack of competition in the market for plasma-derived products is not due to any alleged “anticompetitive” behavior by Grifols, but by government policies that actively restrict entry. The FTC admits as much in its own press release:
Each of these products must be approved by the Food and Drug Administration for sale in the United States. The FDA requires that they be made only from plasma collected in the United States and made at FDA-approved plants.
And yet the FDA is not a co-defendant in the FTC case. Even though it is the FDA that is harming consumers by restricting competition and causing higher prices. The pharmaceutical companies take all the blame.
This case is the poster child for the fraudulent nature of antitrust. The FTC simply ignores actual monopolistic conduct – by the FDA — while manufacturing nonsensical claims of “anticompetitive” conduct by privately owned firms. More egregiously, the FTC routinely aids and abets the FDA’s monopolistic conduct by illegally requiring non-FDA-regulated products, such as dietary supplements, to adhere to the same “scientific” testing standards as regulated pharmaceuticals. In practice, this prevents the development and marketing of cheaper alternatives to FDA-controlled products.
The FTC is simply lying — let me repeat, lying — when it says its goal is “to preserve competition and protect U.S. consumers from higher health care costs.” Every single action the FTC has taken in the past decade with respect to health care has done just the opposite; it has strengthened government cartelization of healthcare providers while playing central planner through its micromanagement of industry mergers.
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Somewhat related:
Seagate, WD should put a gun to Brussels’ head – How can the EC meddle in acquisitions beyond its borders?
http://www.theregister.co.uk/2011/06/01/eu_competition_oddities/
Commentary section is rather revealing.
At least! US Federal Trade Commission thought about Food safety.
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