FTC Requires Pfizer Inc. to Sell Rights to Four Products as a Condition of Acquiring Hospira, Inc.

Pfizer Inc. has agreed to sell the rights and assets related to four pharmaceutical products in order to settle FTC charges that its proposed $16 billion acquisition of Hospira, Inc. is anticompetitive.

Pfizer is one of the world’s largest drug companies and principally competes with Hospira in markets for certain sterile injectable pharmaceutical products. The FTC settlement order preserves competition by requiring the companies to divest the following products to the U.S.-based generic pharmaceutical company Alvogen Group Inc.:

As the proposed buyer, Alvogen has the necessary resources, financial and technical capabilities, and experience marketing generic pharmaceutical products that will enable it to successfully replace the competition that otherwise would have been lost through the proposed acquisition.

The proposed order requires Pfizer to supply Alvogen with the clindamycin phosphate injection product for three years while Pfizer transfers the manufacturing technology to Alvogen or its designee. Pfizer also is required to provide transitional services to Alvogen to assist with establishing manufacturing capabilities and securing FDA approvals to market all of the divested products. The proposed order also allows the Commission to appoint a monitor to oversee the merging parties’ compliance with their obligations under the settlement agreement. Further details about the divestitures are set forth in the analysis to aid public comment for this matter.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 5-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through September 23, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

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.