[Federal Register Volume 80, Number 217 (Tuesday, November 10, 2015)]
[Notices]
[Pages 69675-69677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28522]
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FEDERAL TRADE COMMISSION
[File No. 151 0129]
Mylan N.V.; Analysis 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 December 3, 2015.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/mylanperrigoconsent online or on paper,
by following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Mylan N.V--Consent
Agreement, File No. 151-0129'' on your comment and file your comment
online at https://ftcpublic.commentworks.com/ftc/mylanperrigoconsent by
following the instructions on the web-based form. If you prefer to file
your comment on paper, write ``Mylan N.V.--Consent Agreement, File No.
151-0129'' 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: Jasmine Rosner (202-326-3558), Bureau
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
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 November 3, 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 December 3,
2015. Write ``Mylan N.V.--Consent Agreement, File No. 151-0129'' 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/mylanperrigoconsent 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 ``Mylan N.V.--Consent
Agreement, File No. 151-0129'' 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
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consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives on
or before December 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 Mylan N.V. (``Mylan'') that is designed to remedy the
anticompetitive effects resulting from Mylan's acquisition of Perrigo
Company plc (``Perrigo''). Under the terms of the proposed Consent
Agreement, Mylan is required to divest to Alvogen, Inc. (``Alvogen'')
all of its rights and assets to the following generic pharmaceutical
products: (1) Acyclovir ointment; (2) bromocriptine mesylate tablets;
(3) clindamycin phosphate/benzoyl peroxide gel; (4) hydromorphone
hydrochloride extended release tablets; (5) liothyronine sodium
tablets; (6) polyethylene glycol 3350 over-the-counter (``OTC'') oral
solution packets; and (7) scopolamine extended release transdermal
patches.
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'').
On September 14, 2015, Mylan launched a hostile tender offer to
gain a controlling interest in Perrigo. 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 current and future competition in seven generic
pharmaceutical markets in the United States. The proposed Consent
Agreement will remedy the alleged violations by preserving the
competition that otherwise would be eliminated by the proposed
acquisition.
I. The Products and Structure of the Markets
A generic pharmaceutical drug contains the same active ingredient
as the brand name product, but typically at a much more affordable
price. 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
typically 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 drug.
Rather, generic suppliers compete only against each other.
Mylan's proposed acquisition of Perrigo will lessen competition in
seven concentrated generic pharmaceutical product markets by reducing
the number of current or future suppliers competing in each market. The
proposed acquisition will reduce current competition in four generic
pharmaceutical markets: (1) Bromocriptine mesylate tablets; (2)
clindamycin phosphate/benzoyl peroxide gel; (3) liothyronine sodium
tablets; and (4) polyethylene glycol 3350 OTC oral solution packets.
Bromocriptine mesylate is a dopamine agonist used to treat
Type 2 diabetes, pituitary tumors, Parkinson's disease, neuroleptic
malignant syndrome, and hyperprolactinemia. The market for generic 2.5
mg bromocriptine mesylate tablets is highly concentrated with only
three current suppliers: Mylan, Perrigo, and Sandoz AG. Absent a
remedy, the proposed transaction would consolidate the market from
three to two suppliers.
Clindamycin phosphate/benzoyl peroxide gel is a
combination antibiotic and drying agent used to stop the bacterial
infection that causes acne. Today, only Mylan supplies the market with
generic clindamycin phosphate 1%/benzoyl peroxide 5% gel. Perrigo
recently received FDA approval for generic clindamycin phosphate 1%/
benzoyl peroxide 5% gel and is poised to start supplying the market in
the near future. As a result, the proposed transaction would reduce the
number of generic clindamycin phosphate 1%/benzoyl peroxide 5% gel
suppliers from two to one.
Liothyronine sodium is a synthetic thyroid hormone used to
treat hypothyroidism and to treat or prevent enlarged thyroid glands.
Currently, only three suppliers provide generic liothyronine sodium
tablets in the 0.005 mg, 0.025 mg, and 0.05 mg strengths: Mylan,
Perrigo, and SigmaPharm Laboratories, LLC. The proposed transaction
would further consolidate an already highly concentrated market,
leaving two suppliers post-transaction.
Polyethylene glycol 3350, a laxative, is an OTC oral
solution packet used to treat occasional constipation. In the 17 gm/
packet OTC market, Mylan, Perrigo, and Gavis Pharmaceuticals, LLC, are
the only active suppliers in the market. As a result, the proposed
transaction would consolidate the number of active suppliers of generic
polyethylene glycol 3350 OTC oral solution packets from three to two.
Additionally, the proposed acquisition will reduce future
competition in three generic pharmaceutical markets: (1) Acyclovir
ointment; (2) hydromorphone hydrochloride extended release tablets; and
(3) scopolamine extended release transdermal patches. In each of these
markets, either Mylan or Perrigo is a likely new entrant in the near
future. Without a remedy, the proposed acquisition would eliminate an
independent entrant into each market, likely depriving customers of the
significant cost savings that result when an additional generic
supplier enters a concentrated market.
Acyclovir ointment is a topical product used to slow the
growth and spread of the herpes virus. Mylan and Amneal Pharmaceuticals
LLC currently hold ANDAs and supply acyclovir 5% ointment. Allergan plc
(``Allergan'') also sells an authorized generic version of acyclovir 5%
ointment. Perrigo is one of a limited number of suppliers likely to
enter this market in the near future.
Hydromorphone hydrochloride is an analgesic used to treat
moderate to severe pain in narcotic-tolerant patients. Perrigo and
Allergan hold ANDAs for 8 mg, 12 mg, and 16 mg extended release
tablets. In addition, Mallinckrodt plc markets an authorized generic
version of hydromorphone hydrochloride extended release tablets. Mylan
is one of a limited number of suppliers likely to enter this market in
the near future.
Scopolamine transdermal patches prevent nausea and
vomiting associated with motion sickness and recovery from anesthesia
and surgery. Novartis AG currently markets the branded version,
Transderm Scop, which is available as a 1 mg/72 hour extended release
transdermal patch. Perrigo holds the only approved ANDA for the generic
version of Transderm Scop. Mylan is one of a limited number of other
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suppliers likely to enter this market in the near future. As there is
no generic version of Transderm Scop on the market today, it is likely
that the price for scopolamine transdermal patches would significantly
decrease with the onset of generic competition. Without a remedy, the
proposed acquisition would eliminate the price reductions that would
likely have accompanied Mylan's independent entry into this market.
II. Entry
Entry into each of these generic pharmaceutical markets 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 United States Food and Drug
Administration (``FDA''), is costly and lengthy.
III. Effects
The proposed acquisition likely would cause significant
anticompetitive harm to consumers by eliminating current or future
competition between Mylan and Perrigo in these seven concentrated
markets. In each of these markets, Mylan and Perrigo are two of a
limited number of current or likely future suppliers in the United
States. Market participants characterize each of the markets as a
current or likely future commodity market, in which the number of
generic suppliers has a direct impact on pricing. Customers and
competitors have observed that the price of generic pharmaceutical
products decreases with new entry even after several suppliers have
entered the market. Removal of an independent generic pharmaceutical
supplier from the relevant markets in which Mylan and Perrigo currently
compete likely would result in significantly higher prices post-
acquisition. Similarly, the elimination of a future independent
competitor would prevent the price decreases that are likely to result
from the firm's entry. Thus, absent a remedy, the proposed acquisition
will likely cause U.S. consumers to pay significantly higher prices for
these generic drugs.
IV. The Consent Agreement
The proposed Consent Agreement effectively remedies the proposed
acquisition's anticompetitive effects in each relevant market. Under
the Consent Agreement, Mylan is required to divest to Alvogen its
rights to the seven relevant products. Alvogen is an international
pharmaceutical company, with commercial operations in thirty-four
countries. Its business focuses on developing, manufacturing, and
distributing generic, branded, and OTC pharmaceutical products. Mylan
must accomplish the divestitures to Alvogen and relinquish its rights
to these products no later than thirty 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 Alvogen is
not an acceptable acquirer, or that the manner of the divestitures is
not acceptable, the proposed Order requires Mylan to unwind the sale of
rights to Alvogen and to 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 if
Mylan fails to divest the products as required.
The proposed Consent Agreement contains several provisions to help
ensure that the divestitures are successful. The Order requires Mylan
to take all action to maintain the economic viability, marketability,
and competitiveness of the products to be divested until such time that
they are transferred to a Commission-approved acquirer. Mylan must
provide transitional services to Alvogen to assist it in establishing
independent manufacturing capabilities. These transitional services
include technical assistance to manufacture the divestiture products in
substantially the same manner and quality employed or achieved by
Mylan, and advice and training from knowledgeable Mylan employees.
Mylan must also provide Alvogen with a supply of the divested products
while Mylan transfers manufacturing technology to Alvogen or its
designated manufacturer. The goal of the transitional services is to
ensure that Alvogen will be able to operate independent of Mylan in the
manufacture and sale of the divested products. Nothing in the Consent
Agreement, however, precludes Alvogen from sourcing active
pharmaceutical ingredients or other divestiture product inputs from
Mylan on a negotiated basis.
As Alvogen was unable to perform due diligence on the Perrigo
products at issue, Mylan divested its own on-market, generic acyclovir
ointment product rather than Perrigo's product in development. Because
the competition that is preserved by the proposed Consent Agreement
will only occur when the Perrigo product is launched, the proposed
Order permits Mylan to retain the right to sell acyclovir ointment
through a license from Alvogen until thirty days after Mylan receives
approval for the Perrigo ANDA, but for no longer than three years. This
provision is designed to permit Mylan to remain an active market
participant pending the approval of Perrigo's acyclovir ointment ANDA
but also ensures Mylan's continued incentive to develop and launch the
Perrigo product.
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. 2015-28522 Filed 11-9-15; 8:45 am]
BILLING CODE 6750-01-P