June 8, 2010 – Spanish blood-plasma products company Grifols agreed yesterday to buy its American rival Talecris in a $3.4 billion deal that might draw the attention of federal anti-trust regulators.
The merger was announced on the same day that the Food and Drug Administration (FDA) and Baxter BioScience announced a voluntary recall of two lots of the Baxter intravenous immunoglobulin (IVIG) product GammaGard Liquid due to an increase in adverse allergic reactions.
The affected lots are:
- Lot number LE12J370AB, product code 1500185, NDC number 0944-2700-06,expiration date Nov. 21, 2012.
- Lot number LE12J379AB, product code 1500187, NDC number 0944-2700-05,expiration date Nov. 29, 2012.
The joint developments have heightened safety-net hospitals’ ongoing worries about their ability to access IVIG from their wholesalers at 340B pricing—in the short term due to the recall and in the long term due to the potential Grifols-Talecris merger.
FTC Sued to Block Earlier Talecris Sale
The Grifols-Talecris union was announced just a day shy of the one-year anniversary of the collapse of a merger between Talecris and CSL Limited, the Australian parent of U.S. plasma-products maker CSL Behring. Under that agreement, CSL was to have bought Talecris for $3.1 billion. The Federal Trade Commission (FTC) had filed suit in late May 2009 to block the merger, saying the deal would have significantly reduced competition in the U.S. market for IVIG and other plasma-derivative protein therapies used to treat primary immunodeficiency diseases, chronic inflammatory demyelinating polyneuropathy, alpha-1 antitrypsin disease and hemolytic disease of the newborn.
In its complaint, the FTC noted that the CSL-Talecris merger would have reduced the number of plasma-derivative protein product competitors to four, down from 13 in 1990. Baxter, Grifols and Octapharma are the only other remaining manufacturers in the market.
Members of the 340B provider community had feared that the CSL-Talecris merger would have driven up prices and further limited access to IVIG products at 340B prices. Sources say the FTC considered that concern in reaching its decision to oppose the sale.
FTC spokesman Mitchell Katz says his agency has no comment at this time on the new proposed merger.
According to the Bloomberg news service, Grifols Chief Executive Officer Victor Grifols said during a conference call that he foresaw no problems with the FTC.
“This operation is very different from the previous one,” Grifols was quoted as saying. “Grifols is a much smaller competitor than CSL in the U.S. and we don’t see any conflict that may leave the FTC uncomfortable about the combination of the two companies.”
Hospital Pharmacy Officials Are Wary
Some hospital pharmacists and pharmacy buyers, however, are quite uncomfortable about the prospect of one less company in the plasma-products market.
“Whenever companies merge they quote-unquote streamline production and you have less product on the market,” says Donald Davies, pharmacy government programs coordinator for Clarian Health Partners in Indianapolis. “With the consolidation of two competitors, will they continue to maintain production to allow for patient access at any price, much less at 340B prices?”
“This isn’t any better than the CSL-Talecris merger,” adds Michael Bonck, pharmacy services manager for Franciscan Health System in Tacoma, Wash., who notes that he was interviewed by FTC lawyers about that proposed sale.
“Last fall we were able to get CSL product at 340B pricing and they quit selling it at that price because they claimed they didn’t have any, which is baloney,” Bonck continues. “There’s plenty still in the market. For the past five months we’ve been able to get Talecris product at 340B pricing but if Grifols and Talecris merge I would not expect the same amount would be available, maybe none at all.”