The Federal Trade Commission has ended the obligation of American Home Products Corporation (AHP) to obtain Commission approval before acquiring more than 1 percent of any U.S. developer or manufacturer of tetanus, diphtheria or rotavirus vaccine. The provision was included in a 1995 consent order stemming from AHP's $9.7 billion acquisition of American Cyanamid Company, a competitor in the market for pharmaceutical products. The Commission has replaced the prior-approval requirement with a prior-notification provision.
AHP petitioned the FTC last September to reopen and modify the February 1995 order, pursuant to the FTC's new prior-approval policy. Under that policy, the Commission no longer routinely includes prior-approval provisions in orders stemming from merger cases, and presumes the public interest requires reopening such provisions in outstanding merger orders to make them consistent with the policy.
The modified order announced by the Commission today deletes the prior- approval requirements but requires prior notification, for 10 years, of acquisitions of more than 1 percent of any company involved in the development, manufacture or sale of tetanus, diphtheria or rotavirus vaccines in the United States, or the acquisition of any assets suitable for use in developing, manufacturing or selling those vaccines.
In modifying the order, the Commission said the record in this case shows a credible risk that the respondent could engage in future anticompetitive acquisitions that would not be reportable to the FTC in advance. Accordingly, the Commission modified the order to substitute a prior- notification requirement for the prior-approval requirement.
The Commission vote to reopen and modify the order was 4-0, with Chairman Robert Pitofsky recused.
Copies of the order reopening and modifying the 1995 consent order, as well as other documents associated with this matter, 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 202- 326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(FTC Docket No. C-3557)