[Federal Register Volume 60, Number 3 (Thursday, January 5, 1995)]
[Notices]
[Pages 1782-1784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-250]
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FEDERAL TRADE COMMISSION
[File No. 951 0001]
IVAX Corporation; Proposed Consent Agreement With Analysis To Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
permit, among other things, IVAX, a Florida corporation, to acquire
Zenith Laboratories, except for Zenith's rights to market or sell
extended release generic verapamil under Zenith's exclusive
distribution agreement with G.D. Searle & Co. The consent agreement
also would require IVAX, for ten years, to obtain Commission approval
before acquiring any stock in any entity that manufactures, or is an
[[Page 1783]] exclusive distributor for another manufacturer of,
extended release generic verapamil in the United States.
DATES: Comments must be received on or before March 6, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Ann Malester, FTC/S-2224, Washington, DC 20580. (202) 326-2682.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
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 sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
In the Matter of: IVAX Corporation, a corporation.
[File No. 951-0001]
Agreement Containing Consent Order
The Federal Trade Commission (``Commission''), having initiated an
investigation of the proposed acquisition by IVAX Corporation
(``IVAX'') of all of the voting securities of Zenith Laboratories, Inc.
(``Zenith''), and it now appearing that IVAX, hereinafter sometimes
referred to as ``proposed respondent,'' is willing to enter into an
agreement containing an order to cease and desist from making certain
acquisitions, and providing for other relief:
It is hereby agreed by and between IVAX, by its duly authorized
officer and its attorney, and counsel for the Commission that:
1. Proposed respondent IVAX is a corporation organized, existing,
and doing business under and by virtue of the laws of Florida, with its
offices and principal place of business located at 8800 Northwest 36th
Street, Miami, Florida 33178-2404.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint.
3. Proposed respondent waives:
a. any further procedural steps;
b. the requirements that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
d. any claim under the Equal Access to Justice Act.
4. This agreement shall not become part of the public record of the
proceedings unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the proposed respondent, in which event
it will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the draft of complaint, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section 2.34 of the
Commission's Rules, the Commission may, without further notice to
proposed respondent, (1) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following order in disposition of the proceeding, and (2) make
information public with respect thereto. When so entered, the order
shall have the same force and effect and may be altered, modified, or
set aside in the same manner and within the same time provided by
statute for other orders. The order shall become final upon service.
Delivery by the United States Postal Service of the complaint and
decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any right it may have to any other manner of service.
The complaint may be used in construing the terms of the order, and no
agreement, understanding, representation, or interpretation not
contained in the order or the agreement may be used to vary or
contradict the terms of the order.
7. Proposed respondent has read the proposed complaint and order
contemplated hereby. Proposed respondent understands that once the
order has been issued, it will be required to file one or more
compliance reports showing that it has fully complied with the order.
Proposed respondent further understands that it may be liable for civil
penalties in the amount provided by law for each violation of the order
after it becomes final.
Order
I
It is ordered That, as used in this order, the following
definitions shall apply:
A. ``Respondent'' or ``IVAX'' means IVAX Corporation, its
subsidiaries, divisions, and groups and affiliates controlled by IVAX
Corporation, their directors, officers, employees, agents, and
representatives, and their successors and assigns.
B. ``Zenith'' means Zenith Laboratories, Inc., its subsidiaries,
divisions, and groups and affiliates controlled by Zenith, their
directors, officers, employees, agents, and representatives, and their
successors and assigns.
C. ``Commission'' means the Federal Trade Commission.
D. ``Acquisition'' means the acquisition of all voting securities
of Zenith by IVAX.
E. ``FDA'' means the United States Food & Drug Administration.
F. ``Isoptin SR'' means the sustained-release form of Verapamil
hydrochloride for which Knoll Pharmaceutical Company holds an approved
New Drug Application.
G. ``Verapamil HC1'' means any pharmaceutical drug receiving the
therapeutic equivalence evaluation code ``AB'' by the FDA, which
designates such product as being therapeutically equivalent to Isoptin
SR.
H. ``Searle Distribution Agreement'' means the agreement, dated
March 7, 1994, between G.D. Searle & Co. (``Searle'') and Zenith,
pursuant to which Zenith is appointed the exclusive distributor of
Verapamil HC1 for Searle.
II
It is further ordered That respondent shall not acquire, or
otherwise obtain, any rights to market or sell Verapamil HC1 pursuant
to the Searle Distribution Agreement.
III
It is further ordered That, for a period of ten (10) years from the
date this order becomes final, respondent shall not,
[[Page 1784]] without the prior approval of the Commission, directly or
indirectly, through subsidiaries, partnerships, or otherwise:
A. Acquire any stock, share capital, equity or other interest in
any concern, corporate or non-corporate, engaged at the time of such
acquisition in, or within the two (2) years preceding such acquisition
engaged in, the manufacture of Verapamil HC1 in the United States, or
any concern that is an exclusive distributor of Verapamil HC1 in the
United States for a manufacturer of Verapamil HC1, provided, however,
that each pension, benefit, or welfare plan or trust controlled by
respondent may acquire, for investment purposes only, an interest of
not more than two (2) percent of the stock or share capital of such
person or concern, and further provided, however, that an acquisition
will be exempt from the requirements of this Paragraph III.A. if it is
solely for the purposes of investment and respondent will hold
cumulatively no more than two (2) percent of the shares of any class of
security;
B. Acquire any assets used in or previously used in (and still
suitable for use in) the manufacture of Verapamil HC1 in the United
States; provided however, that this Paragraph III.B. shall not apply to
any acquisition of goods, services, or equipment in the ordinary course
of business;
C. Enter into any agreement with a manufacturer of Verapamil HC1
granting respondent the exclusive right to distribute such
manufacturer's Verapamil HC1 for resale.
IV
It is further ordered That one year (1) from the date this order
becomes final, annually for the next nine (9) years on the anniversary
of the date this order becomes final, and at such other times as the
Commission may require, respondent shall file a verified written report
setting forth in detail the manner and form in which it has complied
and is complying with this order.
V
It is further ordered That respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the corporate
respondent such as dissolution, assignment, sale resulting in the
emergence of a successor corporation, or the creation or dissolution of
subsidiaries or any other change in the corporation that may affect
compliance obligations arising out of the order.
VI
It is further ordered That, for the purpose of determining or
securing compliance with this order, subject to any legally recognized
privilege and upon written request with reasonable notice, respondent
shall permit any duly authorized representatives of the Commission:
A. Access, during office hours and in the presence of counsel, to
inspect and copy all books, ledgers, accounts, correspondence,
memoranda and other records and documents in the possession or under
the control of respondent relating to any matters contained in this
order; and
B. Upon five (5) days' notice to respondent and without restraint
or interference from it, to interview officers, directors, or employees
of respondent, who may have counsel present regarding such matters.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a proposed Consent Order
from IVAX Corporation (``IVAX''), which prohibits IVAX from acquiring
any rights to market or sell generic verapamil hydrochloride in the
extended release form (``generic verapamil'') pursuant to Zenith
Laboratories' exclusive distribution agreement with G.D. Searle & Co.
(``Searle'').
The proposed Consent Order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
Order.
On August 26, 1994, IVAX and Zenith Laboratories, Inc.,
(``Zenith'') entered into an agreement whereby IVAX agreed to acquire
all of the voting securities of Zenith in a share exchange valued at
$593 million. The proposed complaint alleges that the proposed
acquisition, if consummated, would constitute a violation of Section 7
of the Clayton Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of the
FTC Act, as amended, 15 U.S.C. Sec. 45, in the market for the sale of
generic verapamil in the United States. IVAX is the only company with
an approved Abbreviated New Drug Application (``ANDA'') to manufacture
and sell generic verapamil in the United States, and Zenith has
exclusive rights to market and sell generic verapamil for Searle, a
company that manufactures a branded equivalent of the generic drug.
The proposed Consent Order would remedy the alleged violation by
prohibiting IVAX from acquiring Zenith's rights to market or sell
generic verapamil pursuant to the exclusive distribution agreement
between Zenith and Searle. In an effort to address antitrust concerns,
Zenith and Searle had terminated the exclusive distribution agreement
on November 28, 1994, and agreement that Zenith would transfer its
generic verapamil customers to Searle or Searle's designee, which would
continue to sell generic verapamil. As a result, two independent
competitors will remain in the market following the proposed
acquisition. The proposed Consent Order ensures that IVAX will not be
able to renegotiate an exclusive arrangement with Searle after it
acquires Zenith.
Under the provisions of the Consent Order, IVAX is also required to
provide to the Commission a report of its compliance with the
provisions of the Order one (1) year from the date the Order becomes
final, and annually thereafter for nine (9) years.
The proposed Order will prohibit IVAX, for a period of ten (10)
years, from acquiring, without Federal Trade Commission approval, any
stock in any concern engaged in the manufacture of generic verapamil or
in any concern that is an exclusive distributor in the United States
for another manufacturer of generic verapamil, or any assets used in
the manufacture of generic verapamil in the United States, unless they
are acquired in the ordinary course of business. In addition, the
Proposed Order requires IVAX to seek prior Commission approval before
entering into any exclusive agreement to distribute another
manufacturer's generic verapamil. The Consent Order also requires IVAX
to notify the Commission at least thirty (30) days prior to any change
in the structure of IVAX resulting in the emergence of a successor.
The purpose of this analysis is to facilitate public comment on the
proposed Order, and it is not intended to constitute an official
interpretation of the agreement and proposed Order or to modify in any
way their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 95-250 Filed 1-4-95; 8:45 am]
BILLING CODE 6750-01-M