Preserving Competition, FTC Requires Divestitures Before Allowing Tevas $7.4 Billion Acquisition of IVAX

Consent Order Requires Divestitures in 15 Generic Drug Markets

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Under a consent agreement announced today, the Federal Trade Commission will allow Teva Pharmaceutical Industries Ltd.’s (Teva) proposed acquisition of IVAX Corporation (IVAX), provided the companies sell the rights and assets needed to manufacture and/or market 15 generic pharmaceutical products.

The divestiture of these products will ensure the replacement of the competition that would be lost in these markets after the transaction is completed, with two firms, Par Pharmaceutical Companies, Inc. (Par) and Barr Pharmaceuticals, Inc. (Barr), set to acquire the divested generic drugs and market them in the future. Among the drugs to be sold are several forms of generic amoxicillin and amoxicillin clavulanate potassium that are widely used in the United States.

On July 25, 2005, Teva proposed buying all of the issued and outstanding shares of IVAX for approximately $7.4 billion. IVAX, the fifth-largest supplier of generic drugs in the United States and the eleventh-largest drug company based on prescriptions filled, is based in Miami, Florida. The proposed acquisition of IVAX would make Teva, which is based in Israel, the world’s largest generic pharmaceutical supplier.

“Teva and IVAX overlap in a number of generic pharmaceutical markets, and the merger as originally proposed likely would have caused significant harm to U.S. consumers,” said Jeffrey Brennan, Associate Director of the FTC’s Bureau of Competition. “The Commission’s consent order will protect U.S. consumers from higher prices for these important generic drugs by requiring divestitures to replace the competition that otherwise would be lost through the merger.”

The FTC’s Complaint

According to the FTC’s complaint, the proposed acquisition would violate Section 5 of the FTC Act and Section 7 of the Clayton Act, as amended, by eliminating the competition
between Teva and IVAX in the 15 generic drug markets identified. This elimination of current and future competition between Teva and IVAX likely would cause significant harm to consumers in the U.S. markets for these generic drug products by increasing the likelihood of coordinated interaction among competitors or the exercise of unilateral market power by the combined Teva/IVAX. The evidence shows that in these markets, consumers have obtained lower prices due to the competitive rivalry between market participants. The Commission also found that entry into the relevant markets would not be timely, likely, or sufficient to counteract the alleged anticompetitive impacts of the transaction.

The Consent Order

The consent order remedies the allegedly anticompetitive impacts of Teva’s proposed acquisition of IVAX by requiring the divestiture or assignment of the rights and assets needed to develop and market the following generic drugs: 1) amoxicillin clavulanate potassium from IVAX, to be divested to Par; 2) long-acting cefaclor (cefaclor LA) tablets from IVAX, to be divested to Par; 3) pergolide mesylate tablets from Teva, to be divested to Par; 4) estazolam tablets from IVAX, to be divested to Par; 5) leuprolide acetate injection kits from IVAX, to be divested to Par; 6) nabumetone tablets from IVAX, to be divested to Par; 7) amoxicillin from IVAX, to be divested to Par; 8) propoxyphene hydrochloride capsules from IVAX, to be divested to Par; 9) nicardipine hydrochloride capsules from IVAX, to be divested to Barr; 10) flutamide capsules from Teva, to be divested to Par; 11) clozapine tablets from Teva, to be divested to Par; 12) tramadol/acetaminophen tablets from Teva, to be divested to Barr; 13) glipizide and metformin hydrochloride tablets from IVAX, to be divested to Barr; 14) calcitriol injectables from IVAX, to be divested to Par; and 15) cabergoline tablets from Teva, to be divested to Barr.

A complete description of each of the 15 generic drugs to be divested can be found in the Commission’s analysis to aid public comment, which is linked to this press release on the FTC’s Web site.

Other Terms of the Order

The consent order contains other provisions to ensure the divestitures are successful. First, it requires Teva and IVAX to provide transitional services to ensure the acquiring companies can get FDA approval to manufacture the divested drugs independently. Next, Teva and IVAX must supply the acquiring companies with the relevant drugs until the acquiring companies gain approval to manufacture them on their own. Finally, the FTC has appointed R. Owen Richards of Quantic Regulatory Services, LLC to oversee the asset transfers and to ensure Teva and IVAX’s compliance with the terms of the consent order. The order also contains routine reporting requirements.

The Commission vote to approve the consent order and place a copy on the public record was 5-0. The order will be subject to public comment for 30 days, until February 21, 2006, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an 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 $11,000.

Copies of the complaint, consent order, and an analysis to aid public comment are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail:; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at

(FTC File No.: 051-0214)

Contact Information

Media Contact:
FTC Office of Public Affairs
Staff Contact:
Kari Wallace,
Bureau of Competition