Letter urges FTC to block Novo’s $16.5bn Catalent purchase

Twelve organizations, including consumer groups and major labor unions have called upon the US Federal Trade Commission (FTC) to stop the $16.5 billion sale of contract development and manufacturing organization (CDMO) Catalent to pharmaceutical giant Novo Nordisk, as first reported by Reuters.

The letter, signed by the United States Public Interest Research Group, Services Employees International Union, and other organizations expressed concern that the acquisition would stifle competition in the production and sale of glucagon-like peptide-1 (GLP-1) products, which have soared in popularity for their benefits in weight loss and type 2 diabetes management. One report states that the market for such drugs is $47.1 billion in 2024 and projected to grow to $471 billion by 2032.

According to the undersigned organizations, Catalent is a major manufacturer of GLP-1 products, and will thus be relied upon by companies such as Pfizer, Roche, and AstraZeneca that are currently developing GLP-1 products in a market that has only two competitors in Novo Nordisk and Eli Lilly. Novo is thus incentivized to acquire Catalent to prevent competition in the market.

“We are concerned that the merger would change Catalent’s incentives and abilities to service other GLP-1 competitors and potential gene therapy rivals going forward,” the letter reads.

It states that such changes could be harmful for patients. “Catalent, under Novo’s direction, would have the incentive to charge higher prices, provide worse customer service, and give less favorable terms to Novo’s rivals.”

In addition to outlining an impact on the GLP-1 space, the letter also claims the sale will affect cell and gene therapy (CGT) development and manufacturing. “The merged firm would have the incentive and ability to prioritize its own production needs and to pick and choose which rival gene therapies would be allocated manufacturing capacity at current Catalent facilities.”

David Balto, the antitrust lawyer who represents the signees said, "The competitive concerns here go far beyond existing drugs. We believe the commission should look at the impact on future therapies including gene therapy.”

US Senator Elizabeth Warren, who has a history of advocating for patients, also chimed in by sending her own letter to FTC Chair Lina Khan. “I am concerned that this deal could increase Novo Nordisk’s dominance over vital GLP-1 inhibitor drugs, reducing competition and increasing prices for patients,” she wrote.

She concluded with “I urge FTC to closely scrutinize this acquisition and block any activity found to be illegal under antitrust law.”