Competition body allows GSK's buyout of Pfizer unit making vitamins, cough syrup

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Metro Manila (CNN Philippines, July 11) — The Philippine Competition Commission (PCC) has allowed global medicine giants GlaxoSmithKline (GSK) and Pfizer to combine the operations of their over-the-counter drugs in the country.

In a statement, the PCC said it has approved the proposal of GSK Consumer Healthcare Holdings, Ltd. to acquire Pfizer's equivalent line of medicine brands. The decision comes after the competition body took a deeper review of the transaction — which started in April — to check if the merger will be bad for the local market through limited options or rising costs for consumers.

In December 2018, British firm GSK Consumer Healthcare announced that it will be merging its over-the-counter business with Pfizer, from which they expect to generate combined sales worth $12.7 billion. The joint venture meant that GSK will hold a controlling stake at 68 percent, against 32 percent for Pfizer.

For the Philippines, the transaction only means the "pure acquisition of assets including inventories, stock-in-transit, equipment, contracts, and intellectual property," the watchdog said.

The merger mainly covers the consumer business segment of the two pharmaceutical firms, referring to vitamins, cough medicines, and painkillers for children and adults. These are syrups and tablets which can be purchased without a doctor's prescription.

"In its merger review, PCC has cleared the transaction because while the merged firms will gain ability to exercise market power, there is limited incentive for them to increase prices in the local market," the antitrust body said following its June 27 decision. "This is due to the finding that customers’ brand loyalty to medicines that have worked for them in the past means limited diversion between GSK and Pfizer drugs."

For adult cough medicines, GSK owns expectorant Ambrolex and Sinecod while Pfizer owns Robitussin and Loviscol. For children’s cough medicines, GSK has Ambrolex and Sinecod Syrup against Pfizer's Robikids and Loviscol Syrup. 

GSK's Calpol and Voltaren for children's painkillers is matched by Pfizer's Advil Suspension for kids. In the children’s vitamins arena, GSK has Scott’s Vitamins while Pfizer has Children’s Clusivol. Separately, Pfizer also owns the adult brands Clusivol, Stresstabs, Centrum Adult, and Centrum Silver.

The PCC said that the merged entity will also have little room to be complacent as there are other players in the market. Apart from competing with global giants, GSK and Pfizer also have to contend with local pharmaceutical companies and producers of the cheaper generic medicines.