Brief:

M/s Novartis A.G submitted a pre-merger application seeking clearance from the Commission for the proposed acquisition by M/s Novartis A.G of the business relating to a portfolio of oncology products (excluding manufacturing) from M/s GlaxoSmithKline Plc. (‘GSK’) pursuant to a sale and purchase agreement.

GSK is a dominant player in the relevant market, and acquisition of their market share would make Novartis the dominant player, hence posing a potential competition concern. A Phase II review was therefore initiated by the Commission. Both merger parties are engaged in the selling and marketing of oncology products. The only overlapping products however are with respect to ‘Serotonin 5-HT Antagonist’, which both parties market in Pakistan. The only competing products therefore are ‘Ondansetron Sandoz’ of Novartis with ‘Zofran’ of GSK. A large number of alternative Serotonin 5-HT Antagonist products are however also available in Pakistan.

After conducting a Phase II review of the application, the Commission found that 10 major players would still remain in the relevant market after the proposed acquisition. It also found that the total sales generated from the Novartis product, out of its whole oncology portfolio, are negligible. Finally, the Commission found it unlikely that the price of ‘Zofran’ might escalate suddenly. Novartis also intends to continue supplying the GSK product under the brand name of ‘Zofran’, therefore consumer choice will not be affected.

Considering the facts on record and the information gathered during the review, the Commission was of the view that the proposed acquisition is not likely to have an adverse effect on competition in Pakistan, and the acquisition was therefore authorized under Section 3(1)(d)(i) of the Act.