Commission Grants Clearance For Mylan And Upjohn To Merge Subject To A Divestment

The Commerce Commission has granted clearance for Mylan N.V. and Upjohn Inc. (a wholly owned subsidiary of Pfizer Inc) to merge their global pharmaceutical businesses. The clearance is subject to a divestment of certain assets.

In New Zealand, both parties compete to supply off-patent prescription medicines. This includes competing to win contracts to supply medicines that are subsidised by the Pharmaceutical Management Agency (PHARMAC) (the public market) and competing to supply unsubsidised medicines outside the PHARMAC process (the private market).

The Commission considered the proposed merger would be likely to result in a substantial lessening of competition in four markets:

• the public market for gabapentin;
• the public market for pregabalin;
• the public market for celecoxib; and,
• the private market for sildenafil.

The merging parties offered to divest these products from Upjohn to enable another firm to compete in those markets.

“Subject to the divestment being undertaken, the Commission is satisfied that the proposed merger is unlikely to substantially lessen competition in any New Zealand market,” Commission Chair Anna Rawlings said.

“We consider that the divestment will allow another firm to become a credible competitor in the four markets where we had competition concerns. With this divestment, the Commission is satisfied that the merger would not be likely to result in a substantial lessening of competition.”

A public version of the written reasons will be available shortly on the Commission’s

case register

Background

Mylan is a US-based global pharmaceutical company that develops, licenses, manufactures, markets and distributes generic, branded generic and specialty pharmaceuticals. In New Zealand, it specialises in supplying off-patent medicines.

Upjohn is the division of Pfizer that operates Pfizer’s off-patent branded and generic established medicines business and is headquartered in China. Upjohn has a portfolio of 20 off-patent molecules.

Aspen is a global specialty and branded multinational pharmaceutical company, headquartered in South Africa. Aspen has supplied products in New Zealand since 2003. Its portfolio in New Zealand includes prescription, over-the-counter pharmacy and grocery brands.

We will give clearance to a proposed merger if we are satisfied that it is unlikely to have the effect of substantially lessening competition in a market. Further information explaining how the Commission assesses a merger application is available on our

website

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