WASHINGTON (Reuters) - A proposed merger of the two largest U.S. generic drug makers drew fire on Tuesday from Consumers Union and seven other groups, who asked antitrust enforcers to stop Teva Pharmaceutical Industries (ARCA:TEVA) Ltd's (TA:TEVA) proposal to purchase Mylan NV (O:MYL), saying it would lead to higher prices and more drug shortages.
At this point, there is no deal. Mylan has been rebuffing Teva's takeover bids, including one in April for $40 billion. Meanwhile, Mylan has pressed on with a $34 billion hostile bid for Perrigo Co Plc (N:PRGO).
But the groups remain concerned. In their letter to Federal Trade Commission Chairwoman Edith Ramirez, the groups urged the FTC to look at more than just overlapping drugs made by both companies, to determine if a merger of drug makers is legal. The two companies, the letter said, would make 25 percent of all generic drugs.
"We believe you will conclude that the merger would substantially lessen competition in violation of the antitrust laws, and should be blocked," they said in the letter.
Even without the deal, the groups said that more than half of retail generic drugs saw their prices go up between July 2013 and July 2014.
"In the last decade, there has been significant consolidation among generic drug manufacturers. This increased consolidation has already led to higher prices and to generic drug shortages," the groups wrote in a letter.
The groups also said that Teva and Mylan, between them, make 12 of the 70 drugs that the Food and Drug Administration says are in short supply.
"Along with exacerbating the current drug shortages of these medications, a merger between the two largest generic manufacturers would likely eliminate more manufacturing facilities, leading to reduced production and creating other shortages of generic and specialty drugs," the letter said.
Teva said in a statement that it was confident it could arrange sufficient asset sales to make the deal acceptable to antitrust enforcers.
"Teva remains deeply committed to consummating a transaction with Mylan that offers an unparalleled opportunity for greater access to much needed medicines," a company spokesperson said.
Consumer groups signing the letter were: Consumers Union,
Consumer Federation of America, US Public Interest Research Group, Public Citizen, Consumer Action, Consumer Watchdog, Community Catalyst, and the National Center for Health Research.