[Federal Register Volume 80, Number 25 (Friday, February 6, 2015)]
[Notices]
[Pages 6718-6720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-02461]
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FEDERAL TRADE COMMISSION
[File No. 141 0134]
Sun Pharmaceutical Industries Ltd., Ranbaxy Laboratories Ltd.,
and Daiichi Sankyo Co., Ltd.; Analysis of Proposed Consent Orders To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the draft complaint and the terms of the consent
orders--embodied in the consent agreement--that would settle these
allegations.
DATES: Comments must be received on or before March 3, 2015.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/sunpharmaceuticalconsent/ online or on
paper, by following the instructions in the Request for Comment part of
the SUPPLEMENTARY INFORMATION section below. Write ``Sun Pharmaceutical
Industries Ltd.--Consent Agreement; File No. 141-0134'' on your comment
and file your comment online at https://ftcpublic.commentworks.com/ftc/sunpharmaceuticalconsent/ by following the instructions on the web-
based form. If you prefer to file your comment on paper, write ``Sun
Pharmaceutical Industries Ltd.--Consent Agreement; File No. 141-0134''
on your comment and on the envelope, and mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC
20580, or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Aylin M. Skroejer, Bureau of
Competition, (202-326-2459), 600 Pennsylvania Avenue NW., Washington,
DC 20580.
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SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent orders to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for January 30, 2015), on the World Wide Web,
at http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before March 3, 2015.
Write ``Sun Pharmaceutical Industries Ltd.--Consent Agreement; File No.
141-0134'' on your comment. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission tries to remove individuals' home contact
information from comments before placing them on the Commission Web
site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/sunpharmaceuticalconsent/ by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``Sun Pharmaceutical
Industries Ltd.--Consent Agreement; File No. 141-0134'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before March 3, 2015. You can find more information,
including routine uses permitted by the Privacy Act, in the
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Agreement Containing Consent Orders To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an Agreement Containing Consent Orders (``Consent
Agreement'') from Sun Pharmaceutical Industries Ltd. (``Sun'') that is
designed to remedy the anticompetitive effects resulting from Sun's
acquisition of Ranbaxy Laboratories Ltd. (``Ranbaxy'') from Daiichi
Sankyo Co., Ltd. (``Daiichi Sankyo''). Under the terms of the proposed
Consent Agreement, the parties are required to divest all of Ranbaxy's
rights and assets to generic minocycline hydrochloride 50 mg, 75 mg,
and 100 mg tablets (``minocycline tablets'') to Torrent Pharmaceuticals
Ltd. (``Torrent'').
The proposed Consent Agreement has been placed on the public record
for thirty days for receipt of comments from interested persons.
Comments received during this period will become part of the public
record. After thirty days, the Commission will again evaluate the
proposed Consent Agreement, along with the comments received, to make a
final decision as to whether it should withdraw from the proposed
Consent Agreement or make final the Decision and Order (``Order'').
Pursuant to an agreement dated April 6, 2014, Sun plans to acquire
Ranbaxy in an all-stock deal valued at approximately $4 billion (the
``Proposed Acquisition''). The Commission alleges in its Complaint that
the Proposed Acquisition, if consummated, would violate Section 7 of
the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. 45, by lessening future
competition in the markets for each dosage strength of generic
minocycline tablets in the United States. The proposed Consent
Agreement will remedy the alleged violations by preserving the
competition that would otherwise be eliminated by the Proposed
Acquisition.
I. The Product and Structure of the Markets
The Proposed Acquisition would reduce the number of future
suppliers in the markets for generic minocycline tablets, which
physicians prescribe to treat bacterial infections including pneumonia
and other respiratory tract infections, acne, and other skin, genital,
and urinary tract infections. Pharmaceutical companies usually launch
generic versions of drugs after a branded product loses its patent
protection. When only one generic product is available, the price for
the branded product acts as a ceiling above which the generic
manufacturer cannot price its product. During this period, the branded
product competes directly with the generic. Once multiple generic
suppliers enter a market, the branded drug manufacturer usually ceases
to provide any competitive constraint on the prices for generic
versions of the
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drug. Rather, generic suppliers compete only against each other. In
generic pharmaceutical product markets, price generally decreases as
the number of generic competitors increases. The United States is the
relevant geographic market for generic drugs because the U.S. Food and
Drug Administration (``FDA'') must approve them for sale within the
United States.
There are currently only three suppliers of each dosage strength of
generic minocycline tablets in the United States: Ranbaxy, Dr. Reddy's
Laboratories Ltd., and Par Pharmaceutical Companies, Inc. Sun is one of
only a limited number of firms likely to enter the generic minocycline
tablets markets in the near future. Sun's acquisition of Ranbaxy would
therefore deprive consumers of the increased competition and likely
price reductions that would have occurred as a result of Sun's
independent entry.
II. Entry
Entry into the markets for generic minocycline tablets would not be
timely, likely, or sufficient in magnitude, character, and scope to
deter or counteract the anticompetitive effects of the Proposed
Acquisition. The combination of drug development times and regulatory
requirements, including approval by the FDA, is costly and lengthy.
III. Effects
The Proposed Acquisition likely would cause significant
anticompetitive harm to consumers by eliminating future competition
that would otherwise have occurred when Sun's generic minocycline
tablets entered the markets. Market participants characterize generic
minocycline tablets as commodities, and each market as one in which the
number of generic suppliers has a direct impact on pricing. Customers
and competitors have confirmed that the price of generic pharmaceutical
products decreases with new entry even after several other suppliers
have entered the market. Further, customers generally believe that
having at least four suppliers in each generic pharmaceutical market
produces more competitive prices than if fewer suppliers are available
to them.
The Proposed Acquisition would eliminate significant future
competition between Sun and Ranbaxy. The evidence shows that
anticompetitive effects are likely to result from the Proposed
Acquisition due to the elimination of an additional independent
competitor in the markets for generic minocycline tablets, which would
have allowed customers to negotiate lower prices. Thus, absent a
remedy, the Proposed Acquisition will likely cause U.S. consumers to
pay significantly higher prices for generic minocycline tablets.
IV. The Consent Agreement
The proposed Consent Agreement effectively remedies the Proposed
Acquisition's anticompetitive effects in the relevant markets. Pursuant
to the Consent Agreement and the Order, the parties are required to
divest all of Ranbaxy's rights and assets to generic minocycline
tablets to Torrent. The parties must accomplish these divestitures and
relinquish their rights no later than ten days after the Proposed
Acquisition is consummated.
The Commission's goal in evaluating possible purchasers of divested
assets is to maintain the competitive environment that existed prior to
the Proposed Acquisition. If the Commission determines that Torrent is
not an acceptable acquirer, or that the manner of the divestitures is
not acceptable, the proposed Order requires the parties to unwind the
sale of rights to Torrent and then divest the products to a Commission-
approved acquirer within six months of the date the Order becomes
final. The proposed Order further allows the Commission to appoint a
trustee in the event the parties fail to divest the products as
required.
The proposed Consent Agreement and Order contain several provisions
to help ensure that the divestitures are successful. The Order requires
that Ranbaxy transfer to Torrent all confidential business information
and requires that Sun and Ranbaxy take all actions that are necessary
to maintain the full viability and marketing of the generic minocycline
tablets until Torrent commences the distribution, marketing, and sale
of the products.
The proposed Order also requires the parties to divest Ranbaxy's
generic minocycline hydrochloride 50 mg, 75 mg, and 100 mg capsules
(``minocycline capsules'') to Torrent to ensure that Torrent achieves
regulatory approval to qualify a new API supplier for its minocycline
tablets as quickly as Ranbaxy would have. Torrent will be able to
establish the current API supplier of the minocycline capsules as the
API supplier for its minocycline tablets through a less time-intensive
regulatory process if Torrent controls both products and uses the same
API supplier for both. Moreover, the proposed Order requires Sun and
Ranbaxy to manufacture and supply generic minocycline tablets and
capsules to Torrent following the divestiture to allow Torrent to enter
the markets while it validates its manufacturing process and seeks the
necessary FDA approvals.
The Commission will appoint Frank Civille to act as an interim
monitor to assure that Sun and Ranbaxy expeditiously comply with all of
their obligations and perform all of their responsibilities pursuant to
the Consent Agreement. In order to ensure that the Commission remains
informed about the status of the transfer of rights and assets, the
Consent Agreement requires Sun and Ranbaxy to file reports with the
interim monitor who will report in writing to the Commission concerning
performance by the parties of their obligations under the Consent
Agreement.
The purpose of this analysis is to facilitate public comment on the
proposed Consent Agreement, and it is not intended to constitute an
official interpretation of the proposed Order or to modify its terms in
any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-02461 Filed 2-5-15; 8:45 am]
BILLING CODE 6750-01-P