[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25353-25355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10783]
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FEDERAL TRADE COMMISSION
[File No. 111 0051]
Hikma Pharmaceuticals PLC; Analysis of Agreement Containing
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 or deceptive acts or
practices or 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 order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before May 27, 2011.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Hikma, File
No. 111 0051'' to facilitate the organization of comments. Please note
that your comment--including your name and your state--will be placed
on the public record of this proceeding, including on the publicly
accessible FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm.
Because comments will be made public, they should not include any
sensitive personal information, such as an individual'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. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential. * * *,'' as provided in
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which
confidential treatment is requested must be filed in paper form, must
be clearly labeled ``Confidential,'' and must comply with FTC Rule
4.9(c), 16 CFR 4.9(c).\1\
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following Web link: https://ftcpublic.commentworks.com/ftc/hikmabaxter and following the
instructions on the Web-based form. To ensure that the Commission
considers an electronic comment, you must file it on the Web-based form
at the Web link: https://ftcpublic.commentworks.com/ftc/hikmabaxter. If
this Notice appears at http://www.regulations.gov/search/index.jsp, you
may also file an electronic comment through that Web site. The
Commission will consider all comments that regulations.gov forwards to
it. You may also visit the FTC Web site at http://www.ftc.gov/ to read
the
[[Page 25354]]
Notice and the news release describing it.
A comment filed in paper form should include the ``Hikma, File No.
111 0051'' reference both in the text and on the envelope, and should
be mailed or delivered to the following address: Federal Trade
Commission, Office of the Secretary, Room H-113 (Annex D), 600
Pennsylvania Avenue, NW., Washington, DC 20580. The FTC is requesting
that any comment filed in paper form be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington area
and at the Commission is subject to delay due to heightened security
precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws 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,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC Web site, to the extent practicable,
at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC Web site. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at http://www.ftc.gov/ftc/privacy.shtm.
FOR FURTHER INFORMATION CONTACT: Kari A. Wallace (202-326-3085), FTC,
Bureau of Competition, 600 Pennsylvania Avenue, NW., Washington, DC
20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that
the above-captioned 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 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 April 27, 2011), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington,
DC 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an Agreement Containing Consent Orders (``Consent
Agreement'') from Hikma Pharmaceuticals PLC (``Hikma'') that is
designed to remedy the anticompetitive effects of Hikma's acquisition
of certain assets from Baxter Healthcare Corporation, Inc.
(``Baxter''). Under the terms of the proposed Consent Agreement, Hikma
would be required to divest to X-Gen Pharmaceuticals, Inc. (``X-Gen'')
all of Hikma's rights and assets relating to its generic injectable
phenytoin and generic injectable promethazine products.
The proposed Consent Agreement has been placed on the public record
for thirty days for receipt of comments by interested persons. Comments
received during this period will become part of the public record.
After thirty days, the Commission will again review the proposed
Consent Agreement and the comments received, and will decide whether it
should withdraw from the proposed Consent Agreement, modify it, or make
final the Decision and Order (``Order'').
Pursuant to an Asset Purchase Agreement dated October 29, 2010,
Hikma proposes to acquire Baxter's generic injectable pharmaceutical
business in a transaction valued at approximately $111.5 million
(``Proposed Acquisition''). The assets to be sold include chronic pain,
anti-infective, and anti-emetic products, along with Baxter' Cherry
Hill, New Jersey manufacturing facility and Memphis, Tennessee
warehouse and distribution center. The Commission's Complaint alleges
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
competition in the U.S. markets for generic injectable phenytoin and
generic injectable promethazine. The proposed Consent Agreement will
remedy the alleged violations by replacing the competition that would
otherwise be eliminated by the acquisition.
The Products and Structure of the Markets
The Proposed Acquisition would reduce the number of generic
suppliers in each of the relevant markets. The number of generic
injectable suppliers has a direct and substantial effect on pricing.
Phenytoin is an anti-convulsant drug used to control seizures and
prevent them during or after surgery. In 2009, sales of injectable
phenytoin totaled $1.5 million. The branded version of injectable
phenytoin is no longer sold in the United States. The market for
generic injectable phenytoin is highly concentrated; currently only
Hikma, Baxter, and Hospira, Inc. (``Hospira'') sell the product in the
United States. The acquisition of Baxter's injectable business by Hikma
would therefore reduce the number of suppliers of injectable phenytoin
from three to two.
Generic injectable promethazine is used to relieve or prevent some
types of allergies or allergic reactions, to prevent and control motion
sickness, nausea, vomiting, and dizziness, and to help people go to
sleep and control their pain or anxiety before or after surgery. Sales
of generic injectable promethazine totaled $17 million in 2009. The
market for generic injectable promethazine is highly concentrated. Only
three companies currently sell generic injectable promethazine in the
United States: Hikma, Baxter, and Hospira. Hospira's competitive
significance in this market is limited because it only offers a
premium-priced pre-filled syringe, while Hikma and Baxter offer lower
priced ampules and vials that appeal to a broader range of customers. A
fourth company has approval to sell generic injectable promethazine in
the United States and has historically offered the product, but it is
not currently manufacturing the product and its re-entry date is
currently unknown. Thus, the acquisition would result in a market with
only one low-cost competitor.
Entry
Entry into the markets for the manufacture and sale of generic
injectable phenytoin and generic injectable promethazine would not be
timely, likely, or sufficient in magnitude, character, and scope to
deter or counteract the anticompetitive effects of the acquisition.
Entry would not take place in a timely manner because the combination
of generic drug development times and regulatory requirements,
including Food and Drug
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Administration approval, takes at least two years. In addition to the
regulatory hurdles facing a potential entrant, manufacturing
difficulties in producing generic injectable products, combined with
the small size of the markets in question, makes additional entry
unlikely to occur.
Effects
The Proposed Acquisition would cause significant anticompetitive
harm to consumers in the U.S. markets for the manufacture and sale of
generic injectable phenytoin and generic injectable promethazine. In
generic injectable pharmaceuticals markets, price generally decreases
as the second, third, or fourth competitors enter. Thus, reducing the
number of competitors to two and one in each market, respectively,
would cause anticompetitive harm to consumers in these U.S. markets by
increasing the likelihood that consumers would pay higher prices.
The Consent Agreement
The proposed Consent Agreement effectively remedies the Proposed
Acquisition's anticompetitive effects in the relevant markets by
requiring Hikma to divest certain rights and assets related to generic
injectable phenytoin and generic injectable promethazine to a
Commission-approved acquirer no later than ten days after the
acquisition. The acquirer of the divested assets must receive the prior
approval of the Commission. The Commission's goal in evaluating a
possible purchaser of divested assets is to maintain the competitive
environment that existed prior to the acquisition.
The proposed Consent Agreement remedies the competitive concerns
the acquisition raises by requiring Hikma to divest its generic
injectable phenytoin and generic injectable promethazine products to X-
Gen, which will purchase all rights currently held by Hikma. X-Gen is a
New York-based generic injectable pharmaceutical company with 40 active
products and an active product development pipeline. With its
experience in generic injectable markets and strong ties to
manufacturing partners, X-Gen is expected to replicate the competition
that would otherwise be lost with the Proposed Acquisition.
If the Commission determines that X-Gen is not an acceptable
acquirer of the assets to be divested, or that the manner of the
divestitures is not acceptable, the parties must unwind the sale to X-
Gen and divest the phenytoin and promethazine product lines, within six
months of the date the Order becomes final, to a Commission-approved
acquirer. The Commission may appoint a trustee to divest the products
if Hikma 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 Hikma
to take all action to maintain the economic viability, marketability,
and competitiveness of the products until such time as they are
transferred to a Commission-approved acquirer. In addition, the parties
must supply X-Gen with phenytoin and promethazine pursuant to a supply
agreement while Hikma transfers the manufacturing technology to X-Gen
or a third-party manufacturer of X-Gen's choice.
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. 2011-10783 Filed 5-3-11; 8:45 am]
BILLING CODE 6750-01-P