Canada’s Competition Bureau (the “Bureau”) has joined an international multilateral working group that will be focusing on the analysis of pharmaceutical mergers. Initiated by the U.S. Federal Trade Commission, the working group also includes the Antitrust Division of the U.S. Department of Justice, Offices of State Attorneys General, the U.K. Competition and Markets Authority (“CMA”) and the European Commission Directorate General for Competition (“European Commission”).  According to the Bureau, “(t)he goal of the initiative is to identify concrete steps to review and update the analysis of pharmaceutical mergers, which are often subject to review in multiple jurisdictions.” The organizer of the international working group, Acting FTC Chair Rebecca Slaughter, used stronger language, noting that “amid skyrocketing drug prices and ongoing concerns about anticompetitive conduct in the industry, it is imperative that we rethink our approach toward pharmaceutical merger review.” Similarly, the European Commission notes that the working group “will bring enhanced scrutiny and more detailed analysis of these kinds of mergers in the future, for the benefit of consumers.”

The FTC elaborated on the specific questions that the working group will consider, namely:

  • How can current theories of harm be expanded and refreshed?
  • What is the full range of a pharmaceutical merger’s effects on innovation?
  • In merger review, how should [antitrust/competition agencies] consider pharmaceutical conduct such as price fixing, reverse payments, and other regulatory abuses?
  • What evidence would be needed to challenge a transaction based on any new or expanded theories of harm?
  • What types of remedies would work in the cases to which those theories are applied?
  • What have [antitrust/competition agencies] learned about the scope of assets and characteristics of firms that make successful divestiture buyers?

Acting FTC Chair Slaughter is reported to be open to reconsidering completed pharmaceutical mergers based on the international working group’s findings. Acting FTC Chair Slaughter has been openly critical of certain pharmaceutical mergers in the past.  Accordingly, her role in spearheading this international working group is not overly surprising.

No expected timetable has been reported on in regards to the working group’s work product.


  1. The promotion of competition and innovation in Canada’s health sector, including the pharmaceutical industry, is a strategic priority for the Bureau. Accordingly, the Bureau’s participation in this working group is a reminder of this strategic priority. What is unique about this initiative, however, is its focus on a particular industry and the Bureau’s (and working group’s) suggestion that different rules and analytical frameworks may need to be applied to the pharmaceutical industry.
  1. Each of the jurisdictions participating in this working group has its own individual laws and enforcement framework. The Bureau will have particular challenges trying to apply different rules to specific industries in Canada given that the Bureau’s framework for reviewing mergers is largely statutory with well established case law. For example, the consideration of non-merger related factors, such as regulatory abuses, would be a significant departure from the Bureau’s prescribed framework for analyzing mergers. Further, unlike in the US where there is no limitation period to review consummated mergers, Canada has a one-year post-closing limitation period after which time a completed merger cannot be challenged.
  1. Parties contemplating mergers in the pharmaceutical industry in Canada should plan early and anticipate the possibility of a lengthy and rigorous merger review, including in relation to potential divestiture buyers where necessary. Given the stated questions that the working group is considering, the merger review analysis may not only be based on traditional pharma related overlap analyses but also on new theories of harm and other considerations.

If you have questions about the Competition Act or any aspect of this blog post, you can reach out to any member of Fasken’s Competition, Marketing & Foreign Investment group. Our group has significant experience advising clients on all aspects of Canadian competition law.

The information and guidance provided in this blog post does not constitute legal advice and should not be relied on as such. If legal advice is required, please contact a member Fasken’s Competition, Marketing & Foreign Investment group.