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Bristol-Myers Squibb completed its $74 billion acquisition of Celgene after the Federal Trade Commission approved the merger in a controversial 3-2 party-line vote, with Republican commissioners overruling Democratic dissents warning about competitive harm. The FTC required divestiture of blockbuster psoriasis drug Otezla to Amgen for $13.4 billion—the largest merger divestiture in FTC history—but approved the deal despite concerns about reduced competition and pharmaceutical innovation.
The merger was one of three pharmaceutical mega-mergers announced in 2019 (along with AbbVie-Allergan at $63 billion and the Pfizer-Mylan combination) that dramatically increased concentration in the pharmaceutical industry. The combined Bristol-Myers Squibb-Celgene entity became a dominant force in oncology, hematology, and immunology therapeutics, controlling multiple blockbuster drugs and extensive development pipelines.
The FTC's approval was controversial and split along party lines, with the 3-2 Republican majority led by Chairman Joseph Simons approving the deal over Democratic Commissioner dissents. The dissenting commissioners argued that requiring divestiture of Otezla was insufficient to address broader competitive concerns, particularly regarding the combined company's ability to leverage its portfolio power with insurers and pharmacy benefit managers, and the potential for reduced research and innovation investment when competitors merge.
The Otezla divestiture to Amgen, while record-breaking in dollar terms, represented just 18% of the total merger value and addressed only a narrow competitive overlap in psoriasis treatments. Critics noted that the remedy failed to account for broader portfolio effects, the elimination of future competitive research efforts, and the increased ability of the merged entity to exercise market power across multiple therapeutic areas.
The merger exemplified the pharmaceutical industry's ongoing consolidation driven by weak antitrust enforcement. Between 2015-2019, the "Big Pharma" companies that dominated drug development consolidated from approximately ten major players to six, with the surviving companies using their increased scale to raise prices, reduce research investment as a percentage of revenue, and exercise greater power over insurers, physicians, and patients.
Consumer impacts included reduced competition in key therapeutic areas, elimination of competing research programs, higher drug prices due to increased portfolio leverage with insurers, and reduced innovation as merged companies rationalized research efforts and eliminated duplicative programs. Studies have shown that pharmaceutical mergers typically lead to higher prices for existing drugs and reduced investment in novel research.
The Bristol-Myers Squibb-Celgene merger was part of the broader pattern of permissive antitrust enforcement from 2008-2020 that enabled massive consolidation across the economy. The FTC's willingness to approve the deal with limited remedies, despite clear competitive concerns, signaled to other industries that regulators would accept nearly any merger with cosmetic divestitures, regardless of long-term competitive harm.