New Zealand’s competition watchdog Commerce Commission has approved Mylan’s purchase of Abbott Laboratories‘s generic medicines arm Established Pharmaceuticals.

The commission’s clearance is limited to the deal’s impact on New Zealand markets.

In New Zealand, Mylan and Abbott sell a range of generic drugs including hypertension and angina medicine verapamil.

The companies are the only two suppliers of verapamil, which is fully subsidised by government agency Pharmac (Pharmaceutical Management Agency).

Commerce Commission chair Mark Berry said: "The commission is satisfied the acquisition will not, or would not be likely to, substantially lessen competition in the market for the wholesale supply of verapamil.

"The merged firm is likely to face competition for the supply of verapamil at future tenders held by Pharmac.

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"If faced with a price increase, Pharmac, as the sole funder of verapamil, is likely to have a degree of countervailing power."

"The companies are the only two suppliers of verapamil, which is fully subsidised by government agency Pharmac (Pharmaceutical Management Agency)."

The Mylan-Abbott deal obtained similar approval from Competition Commission of India in November.

US-based Mylan announced in July that it is buying Abbott’s Established Pharmaceuticals in a $5.3bn deal.

Abbott will transfer its generic assets to a newly formed entity New Mylan, in which it will hold a 21% stake. Mylan will merge with Netherlands-based New Mylan and the latter will become the former’s parent company.

Under the deal, Mylan will own Abbott’s 100 specialty and branded generic pharmaceutical products in cardio / metabolic, gastrointestinal, anti-infective / respiratory, central nervous system (CNS), pain and women’s and men’s health.

Abbott completed the acquisition of Russian pharmaceutical manufacturer Veropharm. The $305m deal announced in June will provide Abbott with a manufacturing footprint in Russia.

Image: Abbott’s products will help Mylan build on its business in Australia and New Zealand. Photo: courtesy of Abbott.