The Competition Commission of Pakistan (CCP) has approved acquisition of the global vaccines business (excluding influenza business except in China) of Novartis AG by GlaxoSmithKline (GSK) after concluding the Phase II review of the pre-merger application and receiving commitments to address competition concerns.
The CCP initiated the Phase II review of the pre-merger application received from GSK in November 2014 under Section 11 of the Competition Act, 2010, to determine whether the merger situation is likely to substantially prevent or lessen competition in the relevant market.
GSK and Novartis are the two main players in the vaccine business. The overlap was detected in the Meningococcal (ACWY) vaccine, which is used against Neisseria Meningitidis, a bacterium that causes meningitis, meningococcemia, septicemia, and rarely carditis, septic arthritis, or pneumonia, which both GSK and Novartis market in Pakistan through their products, Menveo of Novartis and Mencevax of GSK.
GSK’s Mencevax vaccine has the largest market share of 85.53 per cent while Novartis’s Menveo has only 14.47 per cent market share. Sanofi Pasteur is the only fresh entrant in the market starting its Menactra vaccine in the later part of 2014.
The proposed acquisition raised competition concerns that after acquiring the market share of Novartis, GSK would further strengthen its dominant position in the market for Meningococcal (ACWY) vaccine, with a possibility of price increase or control over supply. It is pertinent to mention here that new entry or expansion in relation to Meningococcal (ACWY) vaccine products requires substantial investment in research and development, which is evident from the fact that it took many years before a new entrant like Sanofi Pasteur could enter the relevant market in Pakistan. Moreover, the effectiveness of each vaccination programme differs in terms of age usage and duration of protection, therefore, it is important to have all meningococcal (ACWY) vaccinations available in the market.