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European Commission - Press release

Mergers: Commission approves acquisition of Hospira by Pfizer, subject to conditions

Brussels, 04 August 2015

The European Commission has approved the proposed acquisition of Hospira by Pfizer under the EU Merger Regulation. Both companies are US based and active globally in the development and marketing of human pharmaceuticals. The approval is conditional on Pfizer divesting certain sterile injectable drugs, as well as its infliximab biosimilar drug, which is currently under development. The Commission expressed concerns that the merged entity would have faced insufficient competitive pressure from the remaining players in the corresponding markets, with a risk of price rises and discontinuation of the development of Pfizer's infliximab biosimilar drug. The commitments offered by the companies address these by removing the overlap between Pfizer and Hospira in all the markets where the Commission identified competition concerns.

Commissioner Margrethe Vestager, in charge of competition policy commented: "This is not just about keeping prices low for patients and healthcare services. We have also made sure that the merger of Pfizer / Hospira does not stand in the way of the research and development of medication that could have huge benefits for society".

Commission investigation

The Commission focused its investigation on the two product areas where Pfizer and Hospira compete, namely biosimilar drugs and sterile injectable drugs.

  • Biosimilar drugs aim to have the same therapeutic mechanism as original patented biological pharmaceuticals, but, unlike generics, are not exact copies of the originator drugs. Given that biological drugs are some of the most expensive therapies available, the entry of biosimilars is expected to allow price decreases and a wider access of patients to biological drugs.

    Infliximab is one of the top three best-selling pharmaceuticals globally, originally developed in the 1990s. It is used to treat autoimmune diseases such as rheumatoid arthritis and Crohn's disease. One biosimilar has been approved for use in the European Economic Area (EEA) (developed by Celltrion but co-marketed by Hospira and Celltrion), and two companies have biosimilars in advanced stages of development (Samsung Bioepis and Pfizer). The investigation showed that competition concerns could arise in the market for infliximab drugs, because following the merger Pfizer would be likely to either:
    • delay or discontinue development of its biosimilar drug in order to focus on Hospira's marketed product, leading to the net loss of future competition by one of only three differentiated biosimilars in advanced stages of development (Hospira/Celltrion's, Samsung Bioepis' and Pfizer's) or

    • hand back Hospira's product to its developer Celltrion, leading to the loss of current price competition between Hospira and Celltrion.

Both outcomes (reduction of differentiated biosimilars from three to two, or loss of price competition) would be detrimental to competition in the infliximab drug market.

  • Sterile injectables cover a large group of medicines administered with a hollow hypodermic needle (pierced through the skin). Most sterile injectables covered by the investigation are used as chemotherapies in the treatment of cancer. For these pharmaceuticals, the investigation showed that competition concerns could arise for certain molecules in some Member States (namely carboplatin in Belgium; cytarabine in Belgium, Italy, Portugal and Sweden; epirubicin in Austria, Belgium, Italy, the Netherlands and Spain; irinotecan in Belgium, the Czech Republic and Italy; vancomycin in Ireland and voriconazole in the EEA as a whole), in particular because of the high combined market shares of Pfizer and Hospira and the limited number of competitors that would remain in these markets.

Commitments

In order to address the competition concerns identified by the Commission, Pfizer submitted a set of commitments. Following the results of an extensive market test of the initial proposal, the companies offered improved commitments consisting of:

  • regarding infliximab, full divestment of the development, manufacturing and marketing rights of its infliximab biosimilar drug currently under development (including appropriate intellectual property, technology and know-how), with marketing rights outside the EEA remaining with the merging entity;

  • regarding sterile injectables, divestment of marketing authorisations and associated rights of Pfizer or Hospira in relation to all problematic molecules in the relevant countries.

The improved commitments fully remove the overlap between Pfizer and Hospira in all the markets where the Commission had identified competition concerns. The Commission was therefore able to conclude that the proposed transaction, as modified by the commitments, would not raise competition concerns. The decision is conditional upon full compliance with the commitments.

The transaction was notified to the Commission on 15 June 2015.

Companies and products

Pfizer, based in the United States, is a global research-based biomedical and pharmaceutical company active in discovering, developing, manufacturing, marketing, and selling innovative medicines for humans.

Hospira, also based in the United States, is a global provider of injectable drugs and infusion technologies, with a broad portfolio of generic, branded and biosimilar medicines for humans.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). This deadline is extended to 35 working days in case remedies are submitted by the parties, such as in this case.

More information will be available on the competition website, in the Commission's public case register under the case number M.7559.

IP/15/5470

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