Seven U.S. senators have asked the
Valeant Pharmaceuticals International Inc. has offered about $53 billion in cash and stock for Allergan and said it would reduce the amount of money the Irvine company spends on research and development of new drugs.
"We are concerned about a growing trend in the pharmaceutical industry whereby companies make acquisitions, eliminate drug pipelines, slash R&D budgets and arbitrage location headquarters in order to lower effective tax rates," the senators wrote. "While these actions might generate short-term stock price increases, they may endanger valuable drug research and thereby undermine an innovative pharmaceutical marketplace and the delivery of effective treatments to patients."
Officials with the FTC and Justice Department could not be reached for comment. A spokeswoman for Valeant did not immediately respond to a request for comment.
Allergan's board has twice rejected buyout offers from Valeant, which is based near Montreal, saying the offer price was too low and undervalued the company's prospects for future growth. Valeant has said Allergan shareholders would benefit from the merger, noting that most R&D spending does not produce significant results.