Lawmaker asks FTC to probe Novo/Catalent deal

US Senator Elizabeth Warren has asked the Federal Trade Commission (FTC) to look into a $16.5 billion deal that would give Novo Nordisk control of manufacturing facilities currently operated by Catalent, saying she is concerned it could have antitrust implications.

The transaction – first announced in February – would see Novo Nordisk's parent company Novo Holdings buy contract development and manufacturing organisation (CDMO) Catalent outright for $16.5 billion, after which Novo Nordisk would pay $11 billion to take control of three of Catalent's fill-and-finish facilities.

In a letter (PDF) to FTC chair Lina Khan, Sen Warren writes that she is worried that the deal will give Novo Nordisk increased dominance in the market for GLP-1 receptor agonist drugs used to treat type 2 diabetes and obesity, leading to reduced competition and increased prices for patients.

The letter indicates that Novo Nordisk already has 55% of the market for diabetes and obesity through its blockbuster Ozempic and Wegovy brands, both based on semaglutide, and points out that Catalent also contracts fill-and-finish services to Eli Lilly, currently its main rival in the GLP-1 market with tirzepatide-based therapies Mounjaro and Zepbound.

The two companies are in a battle for dominance of the obesity market, and both have announced massive investments in manufacturing after struggling to meet the burgeoning demand for their drugs.

"I am concerned that Novo Nordisk’s merger with Catalent will give Novo Nordisk unprecedented visibility into and control over its competitor’s production capacity, costs, and business practices, and the ability to preference its own products and obstruct its competitors' use of Catalent to produce GLP-1 drugs," writes Warren in the letter.

Lilly's chief executive, David Ricks, has also expressed concerns about the proposed transaction, saying earlier this year that Catalent’s client roster includes “in excess of 100 entities, all of which plan to compete in some way with Novo Nordisk," although the company has said that does not include Mounjaro and Zepbound.

Only one of the three sites covered by the deal is located in the US – at Bloomington, Indiana – while the other two are at Anagni in Italy and Brussels in Belgium. They are set to change hands as soon as the Novo Holdings/Catalent merger is completed, which the companies have previously said should occur before the end of this year.

Novo Nordisk has reiterated its position that it will honour all existing contracts at the facilities, although it is understood that, as they come to an end, the intention is to stop using the plants to produce medicines for other companies. It also said it is not aware of any competing GLP-1 products being produced at the facilities.

Warren also draws attention to Novo Nordisk’s "past efforts to restrict competition and maximise profits, including the company’s improper listing of patents for Ozempic and two other drugs used to treat type 2 diabetes in the […] Orange Book, which resulted in a warning letter from the FTC." 

She has asked the FTC to sue to block the deal if the financial regulator finds it illegal in an ongoing review.