WASHINGTON — The Federal Trade Commission has required Indian pharmaceutical company Aurobindo Pharma Limited to divest four generic drug products to resolve anticompetitive concerns and complete its $250 million acquisition of Lannett Company Inc.
The agency announced the action on June 18, stating it would protect American patients from potential higher drug costs resulting from reduced competition in specific generic markets. The divestiture involves products used for conditions including organ transplant rejection prevention and treatment of dry mouth after radiation therapy.
Under the proposed consent order, Aurobindo must sell the assets related to the four generics to Quagen Pharmaceuticals LLC, a New Jersey-based company. The order also requires transition services and appoints a monitor to oversee compliance.
“The FTC’s action today will protect millions of patients from the threat of higher generic drug prices,” Daniel Guarnera, director of the FTC’s Bureau of Competition, said in a statement.
The deal would have combined two of the limited number of competitors in those four generic markets, according to the FTC. Generic drugs typically provide lower-cost alternatives to brand-name medications, and reduced competition can lead to price increases.
Aurobindo, one of the world’s largest generic drug manufacturers, agreed to the divestiture to proceed with the acquisition of Lannett, a Pennsylvania-based generics specialist. The transaction includes entry into new therapeutic areas for Aurobindo, such as attention-deficit/hyperactivity disorder medications, and adds U.S. manufacturing capacity.
The FTC’s intervention reflects ongoing scrutiny of pharmaceutical mergers aimed at preserving competition in the generics sector. Officials have emphasized the importance of maintaining multiple suppliers to keep prices down for consumers.
Aurobindo and Lannett have cooperated with the review process. The companies did not immediately comment on the order beyond confirming the requirement to divest.
As of Thursday, the consent order was subject to public comment. Details on the specific identities of the four divested products and the expected timeline for completing the divestiture and overall transaction remained subject to final approvals. The FTC continues to monitor consolidation in the pharmaceutical supply chain.
