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FTC Examines Another Proposed Major Merger in Drug Industry

November 15, 1994|From Associated Press

WASHINGTON — A week after restricting a major drug industry merger, the Federal Trade Commission is examining another--SmithKline Beecham's purchase of Diversified Pharmaceutical Services Inc.

London-based SmithKline Beecham said Monday that it was not surprised by the FTC's notice, but it added that it worked closely with the agency before finalizing its $2.3-billion deal last May.

Diversified, of Bloomington, Minn., manages prescription drug benefits for 11 million people in the United States. SmithKline Beecham, the world's third-largest pharmaceutical company, has U.S. headquarters in Philadelphia.

Earlier this month, after Eli Lilly Co. agreed to restrictions on its $4-billion purchase of PCS Health Systems Inc., a prescription management business, the FTC said it was concerned about the "overall competitive impact" of such mergers.

Drug benefits managers control the drugs that members of its managed health care programs can use.

Mergers between drug companies and drug benefit managers have raised concerns that the manufacturers would gain unfair advantages over competitors.

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