GSK, Novartis get ACCC okay to restructure


handshake

The Australian Competition and Consumer Commission says it won’t oppose GlaxoSmithKline’s and Novartis’ transactions involving over-the-counter consumer products, human vaccines and oncology products.

As a result of the transactions:

  • GSK will acquire Novartis’ global human vaccines business, except the influenza vaccines business;
  • GSK and Novartis will combine their global consumer health business in a new joint venture entity, which includes products such as Panadol, Voltaren and Zovirax; and
  • Novartis will acquire certain oncology products from GSK.

While each transaction may have raised competition concerns, GSK and Novartis have given undertakings to the ACCC and the European Commission to divest competing products.

“The ACCC was satisfied, taking into account the undertakings, that each of the three proposed acquisitions was unlikely to substantially lessen competition,” ACCC Commissioner Dr Jill Walker says.

As a result of undertakings to the ACCC, GSK will divest Meningococcal vaccine products in Australia and Novartis will divest its smoking cessation products including the Nicotinell brand. As a result of the undertaking to the European Commission, Novartis is divesting, on a global basis, two in-development drugs to treat advanced melanoma.

“The ACCC worked closely with the European Commission, the US Federal Trade Commission and the New Zealand Commerce Commission in assessing these transactions. Where undertakings provided to the European Commission have resolved competition concerns in Australia, the ACCC has taken a pragmatic approach and not sought standalone undertakings in Australia,” says Dr Walker.

“The global commitments to divest the melanoma products in development are important for consumers and protect competition in the future. It reflects the approach of the ACCC to consider not only products now on the market, but also the competitive impact of products that are in development.”

GSK and Novartis overlap in the supply of Meningococcal vaccines in Australia and over the counter products including smoking cessation and pain management products. In relation to oncology products, Novartis has a number of drugs used to treat advanced melanoma in development which are likely to compete with existing GSK products.

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