FTC Puts Conditions on Valeant Pharmaceuticals’ Proposed Acquisition of Precision Dermatology

Order Protects Competition for Topical Acne Treatments

For Release

Valeant Pharmaceuticals International, Inc. and Precision Dermatology, Inc. have agreed to sell or relinquish rights to Precision’s branded single-agent topical tretinoins and generic Retin-A, common acne treatments, to settle Federal Trade Commission charges that Valeant’s proposed $475 million acquisition of Precision would likely be anticompetitive.

This action is part of the FTC’s ongoing effort to protect U.S. consumers from higher healthcare-related costs.

According to the FTC complaint, Valeant’s proposed acquisition of Precision would likely reduce competition in the market for branded and generic single-agent topical tretinoins, and in a separate market for generic Retin-A. Valeant and Precision are the only two significant suppliers of branded single-agent topical tretinoins, and the proposed acquisition would eliminate current competition between them. The companies are also the two largest suppliers of generic Retin-A. The proposed acquisition would give Valeant a monopoly in four of five versions of generic Retin-A and reduce competition in the remaining version.

More information on the branded and generic manufacturers of these products, as well as the respective market shares of the companies, can be found in the analysis to aid public comment for this matter.

The proposed consent order requires Valeant to sell Precision’s assets related to Tretin-X, its branded single-agent topical tretinoin, to Actavis, Inc., and Precision’s assets related to generic Retin-A to Matawan Pharmaceuticals LLC, a subsidiary of Rouses Point Pharmaceuticals, LLC, within 10 days of consummating the transaction. In addition, Actavis and Matawan will each receive partial assignments of the manufacturing contracts for both Tretin-X and generic Retin-A. If the FTC finds that Actavis or Matawan are not acceptable acquirers of the drugs, it can require Valeant to unwind the sales and divest the drugs to another FTC-approved buyer within six months.

The Commission vote to accept the proposed consent order for public comment was 5-0. The FTC will publish the consent agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through August 4, 2014, after which the Commission will decide whether to make the proposed consent order final.

Comments can be submitted electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave. NW, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:
Mitchell J. Katz
Office of Public Affairs
202-326-2161

STAFF CONTACT:
Lynda Lao
Bureau of Competition
202-326-3054