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6 Steps for Quick FTC Antitrust Clearance of Pharma Mergers

Andrew Forman, Christian Lorenz, and Evan Harris, Corporate Counsel, May 1, 2015

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The “merger wave” in the pharmaceutical industry is underscoring the need to be able to interact with the antitrust regulators at the Federal Trade Commission (FTC) effectively and efficiently in order to maximize the chances of obtaining Hart–Scott-Rodino (HSR) clearance quickly. Wave or no wave, merging parties typically wish to secure antitrust clearance as soon as possible to realize the associated synergies and commercial momentum, or to increase the certainty associated with a potential transaction if the target is “in-play.” But the large number of transactions in the industry today underscores the need for speedy clearance so that companies can stay ahead or keep apace of their peers and maximize shareholder benefits. FTC regulators specializing in the pharmaceutical industry have become, and likely will continue to be for the foreseeable future, extremely busy. As a result, developing an efficient strategy to deal with the FTC and other antitrust agencies reviewing pharmaceutical transactions has never been more important for companies.
The guidelines below focus on the common scenario in which the goal is to maximize the chances of obtaining FTC clearance or reducing the scope of a so-called “Second Request” of a pharmaceutical transaction during the initial HSR waiting period.
Of course, we recognize that not all pharmaceutical transactions are alike and differences can impact—sometimes significantly—the parties’ FTC strategy and timing. For example, some transactions require clearances from many jurisdictions around the globe, exposing the parties to different regulatory/timing procedures, remedial policies and, potentially, risk profiles. Moreover, some transactions are good candidates for clearance without any remedies, while others have more remedial risk. These and other factors should be analyzed on a case-by-case basis to determine whether the strategy outlined below makes sense for a particular transaction.

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