Generic-drug maker Mylan on Wednesday received federal approval to acquire pharmaceutical giant Meda in a $7.2 billion cash and stock deal. Mylan, however, has agreed to divest two generic drugs.
Mylan will divest rights to generic carisoprodol tablets, which treat muscle stiffness and spasms, and felbamate tablets, which treat epilepsy, in order to settle concerns by the Federal Trade Commission that the deal would hinder competition.
The FTC's order to Mylan comes on the heels of Teva's agreement to divest a record 79 generic drugs to acquire drugmaker Allergan. The divestiture was the largest ever in an FTC pharmaceutical merger case. Teva offered to buy Mylan in April 2015 in a $40.1 billion deal, but Mylan rejected it, saying the proposal undervalued the company.
A Mylan spokeswoman declined to issue further comment on the divestiture but in a news release the company said the drugs are “not significant to Mylan's earnings.” Mylan expects the deal to close by the end of the third quarter in September.
The FTC has ordered Mylan to issue rights and assets for its felbamate drug to pharmaceutical company Alvogen. If the deal went through without divestment, Mylan and Meda would be one of two companies that offer felbamate tablets, “likely leading consumers to pay higher prices and would eliminate further competition,” the FTC said in a news release.
Mylan must also relinquish marketing rights for its carisoprodol drug. This allows Indicus Pharma, which owns and manufacturers the product, to compete independently.
Mylan announced plans to acquire Meda in February. Mylan's market value is $23.5 billion.