The Federal Trade Commission has given final approval to a consent agreement with Hoechst AG, settling charges that its $7.1 billion merger with Marion Merrell Dow, Inc. (MMD), which created the world's third largest pharmaceutical company, would violate federal antitrust laws by substantially reducing competition for four drugs -- Diltiazem, a hypertension and cardiac drug; drugs used to treat intermittent claudication, severe leg cramps caused by arteriosclerosis; oral-dosage forms of mesalamine, used to treat inflammatory bowel disease; and rifadin, used to treat tuberculosis. The Commission's action makes the consent order provisions binding on Hoechst.
Hoechst is a German firm operating in the United States through its wholly-owned subsidiaries, Hoechst Corporation and Hoechst-Roussel Pharmaceuticals, Inc., both of which are based in Somerville, New Jersey. Prior to the merger, MMD was based in Kansas City, Missouri. The North American headquarters of the combined firm, Hoechst Marion Roussel, Inc., is in Kansas City.
Under the final consent order, the FTC permitted the merger to proceed so long as Hoechst accomplishes certain divestitures and takes other prescribed steps in order to restore competition for the four drugs. Specifically, the order requires Hoechst to:
- provide Biovail Corporation International with a letter of access to the toxicology data necessary to secure additional Food and Drug Administration approvals for Tiazac, a drug designed to compete in the once-a-day dosage diltiazem market that Hoechst had been developing jointly with Biovail prior to the merger (Hoechst already has returned to Biovail the rights to Tiazac);
- return any confidential information obtained from Biovail during the course of their relationship, refrain from using the information, dismiss a patent infringement lawsuit filed by MMD regarding Tiazac, withdraw a citizen petition MMD filed with the FDA relating to Tiazac, and agree not to file any subsequent litigation against Biovail regarding diltiazem;
- divest the rights to either Trental (Hoechst's FDA-approved drug for intermittent claudication) or Beraprost (the drug MMD was developing prior to the merger for this purpose) to a Commission-approved entity that will develop and market the acquired drug.
- divest the rights to either Pentasa (an oral form of mesalamine marketed by MMD) or the generic formulation Hoechst has in development to a buyer approved by the Commission;
- divest either Rifadin (MMD's TB drug) or the generic form of the drug that Hoechst was developing to an FTC-approved entity.
The divestitures must be completed within nine months, and Hoechst is required to maintain the assets and its research and development for the drugs at planned levels pending divestiture. Hoechst also is required to provide technical assistance and advice to the purchasers in obtaining FDA approval.
The consent agreement was announced for a public-comment period on Sept. 18, 1995. The Commission vote to issue it in final form occurred on Dec. 5, and was 5-0.
NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. 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 $10,000.
A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261.
(FTC File No. 951 0090)
(Docket No. C-3629)