The Federal Trade Commission today required – as a condition of Hikma Pharmaceuticals PLC’s $375 million acquisition of Custopharm, Inc. – that Custopharm’s parent company retain and transfer Custopharm’s assets related to the corticosteroid drug triamcinolone acetonide, or TCA, to another subsidiary, Long Grove Pharmaceuticals, LLC. The consent agreement preserves competition in the market for generic TCA by removing any incentive for Hikma to terminate or delay the marketing of the TCA product in its own development pipeline. Historically, the entry of additional generic pharmaceutical competitors has led to lower prices for patients. Further, the consent agreement requires Long Grove to maintain the competitive viability of the retained TCA assets going forward and requires Hikma to seek Commission approval for future acquisitions related to TCA.
“Hikma’s acquisition of Custopharm’s TCA business could have caused significant harm for patients who use TCA to treat severe skin conditions, allergies, and inflammation,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Only three competitors now market this drug. The FDA recently approved marketing of Custopharm’s TCA product, while Hikma has an injectable TCA product in development. The FTC’s action ensures that Hikma still has the incentive to bring its TCA product to market, which will benefit consumers.”
Hikma is a multinational pharmaceutical company with U.S. headquarters in Berkeley Heights, NJ. It manufactures branded and generic products, including generic injectables. Custopharm develops mostly generic injectable drugs and it relies on contract manufacturers to produce them.
According to the Complaint, without this remedy, Hikma likely would have stopped developing its own injectable TCA product, threatening additional competition in the TCA market.
The presence and number of generic firms determines drug prices and each new generic product that comes to market tends to decrease drug prices.
Under the terms of the proposed Order, Water Street Healthcare Partners, LLC and its subsidiary, Long Grove Pharmaceuticals, LLC are required to operate and maintain Custopharm’s TCA assets for four years after the date the order is issued. Long Grove is a specialty drug development company that focuses on complex generic products. As explained in the accompanying analysis to aid public comment, the proposed Order also allows the Commission to appoint a monitor to report on the companies’ compliance with the order’s requirements.
The Commission vote to issue the complaint and accept the proposed consent order for public comment was 4-0. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.
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 $46,517.