BRUSSELS—Pfizer Inc. received a green light from European Union
regulators Tuesday for its $16 billion acquisition of smaller rival
Hospira Inc. after agreeing to make divestments designed to guard
against price rises and protect the research and development of
drugs.
The deal, announced in February, will transform New York-based
Pfizer into a leading player in the emerging market for
lower-priced versions of costly biotech drugs.
EU regulators had worried that the two companies, both based in
the U.S., would together have a high market share for certain
sterile injectable drugs, which are administered with a hollow
hypodermic needle.
Regulators were also concerned that the companies might delay or
discontinue production of a copycat version of Infliximab, a
popular drug used to treat autoimmune diseases such as rheumatoid
arthritis and Crohn's disease.
To assuage those concerns, Pfizer agreed to fully divest the
development, manufacturing and marketing rights of its Infliximab
biosimilar drug currently in development, though it will retain
marketing rights outside Europe. It also agreed to divest certain
sterile injectable drugs that raised competition concerns in
individual EU countries.
"This is not just about keeping prices low for patients and
health care services," the EU's antitrust chief Margrethe Vestager
said in a statement. "We have also made sure that the merger of
Pfizer/Hospira doesn't stand in the way of the research and
development of medication that could have huge benefits for
society."
Biotech drugs with more than $100 billion in sales are expected
to lose patent protection in the next five or 10 years, according
to Pfizer. Industry officials expect there will be strong demand
for lower-price versions of the drugs amid global pressures over
costs.
Write to Tom Fairless at tom.fairless@wsj.com
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