Legal Library: Cases and Proceedings

The Commission challenged Pfizer Inc.’s proposed $68 billion acquisition of Wyeth and required significant divestitures to preserve competition in multiple U.S. markets for animal pharmaceuticals and vaccines. The proposed consent order remedies the anticompetitive effects the Commission believes are likely to result from the transaction in numerous markets for animal vaccines and animal pharmaceutical products. After a thorough investigation, the Commission concluded that the transaction does not raise anticompetitive concerns in any human health product markets.

Generic drug marketer Hikma Pharmaceuticals PLC agreed to divest its rights and interests in five generic injectable pharmaceuticals to settle charges that its $5 million acquisition of the rights to various drug products and related assets from Ben Venue Laboratories, Inc. would likely be anticompetitive. According to the complaint, without a remedy, Hikma’s purchase of certain generic injectables would likely harm future competition in the U.S. markets for (1) Acyclovir sodium injection: an antiviral drug used to treat chicken pox, herpes, and other related infections, (2) Diltiazem hydrochloride injection: a calcium channel  blocker and antihypertensive used to treat hypertension, angina, and arrhythmias, (3) Famotidine injection: a treatment for ulcers and gastroesophageal reflux disease, (4) Prochlorperazine edisylate injection: an antipsychotic drug used to treat schizophrenia and nausea, and (5) Valproate sodium injection: a treatment for epilepsy, seizures, bipolar disorder, anxiety, and migraine headaches. Hikma is required to divest the five generic injectable drug assets to Amphastar Pharmaceuticals, Inc., a California-based specialty pharmaceutical company that sells generic injectable and inhalation products.

Mylan N.V. agreed to sell the rights and assets related to seven generic drugs in order to settle FTC charges that its proposed acquisition of Perrigo Company plc would be substantially reduce competition in the markets for those drugs if the merger proceeded as originally proposed. 

Pharmaceutical companies Endo International plc and Par Pharmaceuticals, Inc. agreed to divest all of Endo’s rights and assets to generic glycopyrrolate tablets and generic methimazole tablets in order to settle FTC charges that Endo’s proposed $8 billion acquisition of Par would likely be anticompetitive. New Jersey-based generic drug marketer Rising Pharmaceuticals will acquire the divested assets. Under the settlement, Endo must supply Rising with the divested products for two years, while it transfers the manufacturing technology to Rising’s chosen third-party manufacturer. Endo also must provide technical assistance, training, and other transitional services to help Rising establish manufacturing capabilities. Without the divestitures required by the proposed order, the FTC alleges that the acquisition would combine the two most significant suppliers in the market for generic glycopyrrolate tablets, which are used with other drugs to treat certain types of ulcers, and two of only four active suppliers in the market for generic methimazole tablets, which are used to treat the body’s production of excess thyroid hormone.

Pharmaceutical companies Concordia Pharmaceuticals Inc. and Par Pharmaceutical, Inc. settled FTC charges that they entered into an unlawful agreement not to compete in the sale of generic versions of Kapvay, a prescription drug used to treat Attention Deficit Hyperactivity Disorder. As part of the settlement, the companies agreed not to enforce the anticompetitive provisions of their agreement. Until May 15, 2015, Concordia and Par were the only two firms permitted by the FDA to market generic Kapvay. Rather than competing against one another, Concordia agreed not to sell an authorized generic version of Kapvay in exchange for a share of Par’s revenues. Under the terms of the settlements, Concordia is prohibited from enforcing the anticompetitive provisions of its agreement with Par, including the profit-sharing provisions, and Par is prohibited from enforcing provisions that bar Concordia from agreeing not to sell an authorized generic version of Kapvay. Concordia began selling generic Kapvay after learning of the FTC’s investigation.

The FTC issued an administrative complaint charging that Steris Corporation’s proposed $1.9 billion acquisition of Synergy Health plc would violate the antitrust laws by significantly reducing future competition in regional markets for sterilization of products using radiation, particularly gamma or x-ray radiation. The Commission also authorized agency staff to seek a temporary restraining order and preliminary injunction in federal court to maintain the status quo pending an administrative trial on the merits. According to the FTC, it is unlikely that new competitors in the market for contract radiation sterilization services would replicate the competition that would be eliminated by the merger. The Commission alleged that the challenged acquisition would eliminate likely future competition between Steris’s gamma sterilization facilities and Synergy’s planned x-ray sterilization facilities in the United States, thus depriving customers of an alternative sterilization service and additional competition. On September 25, 2015 the district court denied the FTC motion for a PI. On October 30, the Commission dismissed the administrative complaint.

Cardinal Health, Inc. agreed to resolve charges that it illegally monopolized 25 local markets for the sale and distribution of low-energy radiopharmaceuticals and forced hospitals and clinics to pay inflated prices for these drugs. According to the FTC’s complaint, through separate acquisitions in 2003 and 2004, Cardinal became the largest operator of radiopharmacies in the United States and the sole radiopharmacy operator in 25 metropolitan areas. Between 2003 and 2008, Cardinal employed various tactics to coerce and induce two suppliers to refuse to grant distribution rights for their respective heart perfusion agents products to new competitors in the relevant markets. As a result of these tactics, the complaint alleges that Cardinal obtained de facto exclusive distribution rights to the only HPAs available on the market and prevented numerous potential entrants from gaining access to these radiopharmaceuticals. The stipulated order requires Cardinal to pay $26.8 million of ill-gotten gains and represents the second largest monetary settlement the FTC has obtained in an antitrust case. The money will be deposited into a fund for distribution to injured customers. The order also includes provisions to prevent future violations and restore competition in six markets where Cardinal remains the dominant radiopharmacy.

Pharmaceutical companies Sun Pharmaceutical Industries Ltd. and Ranbaxy Laboratories Ltd. agreed to divest Ranbaxy’s interests in generic minocycline tablets in order to settle FTC charges that Sun’s $4 billion proposed acquisition of Ranbaxy would likely be anticompetitive. Torrent Pharmaceuticals Ltd., a global drug company based in India that markets generic drugs in the United States, will acquire the divested assets. Under the settlement, Sun and Ranbaxy must also sell Ranbaxy’s generic minocycline capsule assets to Torrent, to enable Torrent to achieve regulatory approval for a change in ingredient suppliers for its minocycline tablets as quickly as Ranbaxy would have been able to do in the absence of the deal. In addition, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure.

The Commission challenged Schering-Plough’s proposed $41.4 billion acquisition of Merck & Co., and required divestitures to preserve competition in markets for human and animal pharmaceuticals. The proposed consent order requires that Merck sell its interest in Merial Limited, an animal health joint venture with Sanofi-Aventis S.A., and that Schering-Plough sell its assets related to significant drugs for nausea and vomiting in humans.

Global medical technology company Medtronic, Inc. agreed to divest the drug-coated balloon catheter business of Ireland-based medical products company Covidien plc, in order to settle FTC charges that its $42.9 billion acquisition of Covidien would likely be anticompetitive. Under the FTC’s proposed settlement, Medtronic will sell the drug-coated balloon catheter business to a Colorado-based medical device company, The Spectranetics Corporation. According to the FTC’s complaint, both Medtronic and Covidien are developing drug-coated balloon catheters to compete with C.R. Bard, Inc., which currently is the only company that supplies these products, used to treat peripheral artery disease, in the U.S. market. Medtronic and Covidien are the only companies with products in clinical trials in the Food and Drug Administration’s approval process, which makes it unlikely that other competitors could enter the market in time to counteract the effects of the merger.

Pharmaceutical company Prestige Brands Holdings, Inc., the maker of Dramamine, agreed to divest assets and marketing rights for the over-the-counter motion sickness drug Bonine to settle FTC charges that Prestige’s proposed acquisition of Insight Pharmaceuticals Corporation would likely be anticompetitive. Prestige proposed to acquire Insight for $750 million. According to the FTC’s complaint, Prestige’s Dramamine, which is the best-selling branded product in the market for over-the-counter motion-sickness drugs, and Insight’s Bonine, are the only two branded products with significant sales. Absent a remedy, the acquisition would eliminate the close competition between Dramamine and Bonine, likely leading to higher prices for consumers.

Pharmaceutical companies Actavis plc and Forest Laboratories, Inc. agreed to sell or relinquish their rights to four generic pharmaceuticals that treat hypertension, angina, cirrhosis, and prevent seizures to settle FTC charges that Actavis’s acquisition of Forest likely would be anticompetitive. According to the FTC’s complaint, Actavis’s acquisition of Forest, as originally proposed, would violate federal antitrust laws by reducing competition in the markets for three current generic products. In addition, the FTC’s complaint also alleges that the proposed transaction would delay the introduction of another generic drug. Under the proposed FTC settlement order, the companies have agreed to relinquish their rights to market generic diltiazem hydrochloride (AB4) to Valeant Pharmaceuticals International, Inc.; sell generic ursodiol and generic lamotrigine ODT to Impax Laboratories, Inc.; and sell generic propranolol hydrochloride to Catalent Pharma Solutions, Inc. Under the terms of the proposed settlement, Actavis and Forest must ensure the viability, marketability, and competitiveness of the drugs that are
being divested until they are sold.

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