CFIUS CHANGES: FIRRMA GIVES PHARMA M&A A STRONG DOSE OF NATIONAL SECURITY MEDICINE
The Foreign Investment Risk Review Modernization Act (FIRRMA), which has recently been signed into law by president Trump, introduces a number of significant changes in national security reviews conducted by the Committee on Foreign Investment in the United States (CFIUS). Their effects will be felt across a wide range of industries, from high tech to real estate and investment funds. The pharmaceutical sector will not be immune.
The FIRRMA changes include the introduction of CFIUS filing fees equal to the lesser of 1 percent of transaction value or $300,000, and an extension to 45 days of the minimum time for CFIUS review. The latter does not represent much change given CFIUS’s current practice of requesting withdrawal and refiling of notices whenever it needs additional time. More interesting than these new mechanics is the prospect that US pharmaceutical transactions not previously notified to CFIUS may now need to be notified because they meet the new FIRRMA definition of “covered transaction” and may even be subject to mandatory notification under the new rules.
Oct-Dec 2018 Issue
Sheppard, Mullin, Richter & Hampton LLP