The Australian Competition and Consumer Commission (ACCC) announced it would not oppose British pharmaceutical company GlaxoSmithKline’s proposed acquisition of Pfizer’s consumer healthcare business in Australia.
The proposed acquisition will combine the consumer healthcare businesses, covering the majority of their over-the-counter products.
This includes the well-known pain management products Panadol and Voltaren, both supplied by GSK, and Advil, which Pfizer produces, as well as other gastrointestinal and cold and flu products.
The major competitor to both Panadol and Advil is Nurofen, an ibuprofen product supplied by Reckitt Benckiser.
“We found that Nurofen would compete strongly with the pain medication produced by a combined GSK/Pfizer, ACCC Commissioner Roger Featherston said in a statement. “Also, the combined businesses would continue to face competition from the range of generic options available to consumers, which contain identical active ingredients and are usually much cheaper.”
The ACC statement noted the organization considered the potential effects of the proposed acquisition on competition in a market for the national supply of over the counter pain management products at a wholesale and retail level.
The Commission also considered that there are a number of generic and private-label OTC pain management products with the same active ingredients as Panadol or Advil, with similar levels of market share to Advil.
The ruling noted that despite strong brand recognition in America and ongoing marketing expenditure in Australia, Advil’s limited brand recognition in Australia, combined with its limited market share, meant Advil was unlikely to be a “strong constraint” on the leading brands, Panadol and Nurofen, if the acquisition did not go ahead.
“In relation to gastrointestinal, and cold and flu products, we found that GSK’s and Pfizer’s products have relatively low market share and are constrained by a wide range of branded and generic competing products,” Featherston continued.
Overall, the ACCC determined that the proposed acquisition was unlikely to substantially lessen completion in the wholesale or retail supply of gastrointestinal, or cold and flu products.
In December 2018, the two pharma giants announced they're creating their own consumer healthcare company, a joint venture called GSK Consumer Healthcare, which will specialize in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health.
A joint statement claimed the new entity would be among the largest consumer healthcare providers in all of the United States, Europe, China, India and Australia and will operate globally under the GSK Consumer Healthcare name.
Nathan Eddy is a healthcare and technology freelancer based in Berlin.
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