Lawmakers fight for cheaper Botox

A bipartisan group of eight lawmakers on Tuesday sought to stop a billionaire hedge fund manager’s effort to put together a huge Botox deal.

The House members wrote to Federal Trade Commission Chairwoman Edith Ramirez, saying they are worried the deal could lead to more expensive Botox treatment and lead to less market competition.

{mosads}The group is taking on Bill Ackman, a hedge fund manager and activist who is no stranger to political fights.

Ackman’s Pershing Square Capital is orchestrating Valeant Pharmaceuticals’ proposed $50 billion bid to acquire Botox-maker Allergan Inc., an Irvine, Calif.-based company that vehemently rejected the deal.

The lawmakers wrote Ramirez they’re “concerned that eliminating market competition by combining the product sets of the two companies may have a negative impact on consumers.”

Ackman’s Pershing Square has a 9.7 percent stake in Allergan. Ackman has publicly launched a public relations war in recent weeks against Allergan, questioning its long-term growth and business makeup.

Valeant is expected to release a second bid on Wednesday, but Allergan looked to go on offense with congressional support on Tuesday. 

“The consolidating of market share in Valeant may allow it to drive up prices for consumers and patients while limiting product options,” said the letter, which was circulated by Rep. Joe Barton (R-Texas).

Reps. Marsha Blackburn (R-Tenn.), Pete Olson (R-Texas), Leonard Lance (R-N.J.), John Barrow (D-Ga.), Lois Capps (D-Calif.), Jim Matheson (D-Utah) and Mike Pompeo (R-Kan.) also signed the letter.

Meanwhile, House Financial Services Committee member Ed Royce (R-Calif.) sent a letter to Securities and Exchange Commission Chairwoman Mary Jo White expressing similar concerns. 

“Pershing Square has scheduled a shadow shareholder vote or referendum. Pershing Square controls the timing, wording, and rules, yet it is seeking an official seal of approval from the SEC for the vote,” Royce wrote.

In an interview, Royce said that Ackman’s tactics could expose loopholes at the Securities and Exchange Commission.

“This is the first shadow shareholder referendum of its kind filed at the SEC,” Royce said, “and it’s at the expense of shareholder transparency.”

Earlier Tuesday, Allergan officials filed a presentation with the Securities and Exchange Commission saying that Valeant “substantially” undervalued the company.

It seems as if the Botox battle is hurting both companies, with Valeant taking more of a beating from shareholders on Tuesday. Allergan shares closed down 1.43 percent, while Valeant shares decreased 3.15 percent on Tuesday.

Ackman is already embroiled in a couple of other Washington political battles, most recently disclosing in November that Pershing Square has a 10 percent stake in mortgage giants Fannie Mae and Freddie Mac. And earlier this month, he recommended that investors purchase shares of the mortgage giants, which taxpayers bailed out following the 2008 economic collapse — not to mention that a bipartisan group of lawmakers and policymakers are seeking to shut down.