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Arguing that the Federal Trade Commission did not follow “best practices” in approving AbbVie’s recent acquisition of Allergan, the California Attorney General is urging the agency to study the extent to which product divestitures relieve anti-competitive concerns in pharmaceutical mergers.

In arguing for a study, California Attorney General Xavier Becerra contended the FTC disregarded its own rules and principles for approving the $63 billion merger, which prompted concerns from some lawmakers and consumer groups that such large deals contribute to rising drug prices. In doing so, he picked up on objections voiced by one FTC commissioner who dissented when the deal was approved in May.


For instance, Becerra cited an FTC rule indicating a preference for one of the merging companies to sell an existing medicine that competes in the marketplace, rather than potentially rival pipeline drugs. Why? A pipeline drug may never win regulatory approval, so allowing its sale would fail to ensure the market for such medicines is fully competitive. Yet the FTC allowed Allergan to sell a pipeline drug.

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