The European Commission today (4 August) approved the takeover of a German generic-drugs firm Ratiopharm by an Israeli pharmaceuticals company, Teva.

The Commission made its approval conditional on Teva agreeing to sell to competitors the rights to sell some of Ratiopharm’s drugs in the Netherlands and Hungary. Teva also had to agree to sell Ratiopharm’s entire distribution business in the Netherlands.

An investigation by Commission officials found that these divestments were necessary to safeguard competition on the internal market.

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“Due to very high market shares for a number of products in the Netherlands, in combination with the overall strength of the company post merger, it would be a clear market leader,” the Commission said.

It said that Teva would give up the right sell 15 drugs in the Netherlands, including drugs to treat anaemia, hypertension, asthma, gout, and inflammation.

The Commission said that the sale of Ratiopharm’s distribution business in the Netherlands was essential to ensure that the competitor that bought the right to sell the 15 drugs could market them as effectively as Ratiopharm had.

The Commission’s concerns about the Hungarian market centred on the “very high” combined market share Teva and Ratiopharm have there for painkillers.

Ratiopharm’s business in focused on the manufacturing of generic drugs, drugs produced and distributed without patent protection. Teva is active in the manufacturing of both generic and proprietary – that is, patent-protected – drugs.

The Commission said that its investigation into the proposed merger “found that competition concerns could be excluded in a large majority of the affected pharmaceutical markets, due to the constraint that other generic companies would continue to provide to the parties”.