Actavis Group hf. and Abrika Pharmaceuticals, Inc.; Analysis of Agreement Containing Consent Order To Aid Public Comment, 19931-19932 [E7-7478]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 72, Number 76 (Friday, April 20, 2007)]
[Notices]
[Pages 19931-19932]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-7478]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 071 0063]


Actavis Group hf. and Abrika Pharmaceuticals, Inc.; Analysis of 
Agreement Containing Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

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 14, 2007.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Actavis Group, et al., File No. 071 0063,'' 
to facilitate the organization of comments. A comment filed in paper 
form should include this 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 135-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing 
confidential material must be filed in paper form, must be clearly 
labeled ``Confidential,'' and must comply with Commission Rule 4.9(c). 
16 CFR 4.9(c) (2005).\1\ 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. Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form as part of or as an attachment to email messages 
directed to the following e-mail box: consentagreement@ftc.gov.
---------------------------------------------------------------------------

    \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 Commission Rule 4.9(c), 
16 CFR 4.9(c).
---------------------------------------------------------------------------

    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at https://www.ftc.gov. As a matter of discretion, the FTC 
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 https://
www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Kari Wallace, (202) 326-3085, Bureau 
of Competition, Room NJ-5108, 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 of 
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 16, 2007), on the World Wide Web, at https://www.ftc.gov/os/
2007/04/index.htm. 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 Order (``Consent 
Agreement'') from Actavis Group hf. (``Actavis''), which is designed to 
remedy the anticompetitive effects of the acquisition of Abrika 
Pharmaceuticals, Inc. (``Abrika'') by Actavis. Under the terms of the 
proposed Consent Agreement, the company would be required to assign and 
divest the Abrika rights and assets necessary to manufacture and market 
generic isradipine capsules to Cobalt Laboratories, Inc. (``Cobalt''), 
the U.S. subsidiary of Arrow Group.
    The proposed Consent Agreement has been placed on the public record 
for thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) 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 Agreement and Plan of Merger executed on November 
20, 2006, Actavis proposes to acquire all of the voting securities of 
Abrika for $235 million. 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 the manufacture and sale of generic 
isradipine capsules. The proposed Consent Agreement will remedy the 
alleged violation by replacing the lost competition that would result 
from the acquisition in this market.
    Actavis is a leading developer, manufacturer, marketer, and 
distributor of generic pharmaceutical drugs. Headquartered in Iceland, 
Actavis sells generic pharmaceuticals in over 30 countries and has 
manufacturing facilities in Europe, the United States,

[[Page 19932]]

and Asia. Abrika is a Sunrise, Florida based specialty generic 
pharmaceutical company engaged in the formulation and commercialization 
of both controlled release and immediate release products.

Generic Isradipine Capsules

    Isradipine belongs to a group of drugs known as calcium channel 
blockers. Calcium is involved in blood vessel contraction, and by 
blocking calcium, isradipine relaxes and widens the blood vessels, 
thereby lowering blood pressure, preventing spasms of the blood vessels 
of the heart and reducing the oxygen needs of the heart muscle. 
Isradipine is typically prescribed to patients as a blood pressure 
lowering medication, and is also used to treat hypertension, ischemia 
and depression. Generic isradipine was first introduced in the United 
States in 2006. Sales in that year totaled approximately $3 million.
    Actavis and Abrika are the only two companies selling generic 
isradipine capsules in the United States. The number of generic 
suppliers has a direct and substantial effect on generic pricing, as 
each additional generic supplier can have a competitive impact on the 
market. Because there are multiple generic equivalents for isradipine 
capsules, the branded version no longer significantly constrains the 
generic's pricing.
    Entry into the market for the manufacture and sale of generic 
isradipine capsules would not be timely, likely, or sufficient in its 
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 FDA drug approval requirements takes at least two years. 
Entry would not be likely because the relevant market is relatively 
small and in decline, limiting sales opportunities for any new entrant.
    The proposed acquisition would cause significant anticompetitive 
harm to consumers in the U.S. market for the manufacture and sale of 
generic isradipine capsules. The acquisition would eliminate Abrika as 
a competitor and create a monopoly in the market for the manufacture 
and sale of generic isradipine capsules. The evidence indicates that 
the presence of more than one competitor allows customers to negotiate 
lower prices and that the reduction in the number of competitors in 
this market would allow the merged entity to unilaterally exercise 
market power with a resulting increase in prices.

The Consent Agreement

    The proposed Consent Agreement effectively remedies the proposed 
acquisition's anticompetitive effects in the relevant product market. 
Pursuant to the Consent Agreement, Actavis and Abrika are required to 
divest certain rights and assets related to the generic isradipine 
capsules to a Commission-approved acquirer no later than ten (10) days 
after the acquisition. Specifically, the proposed Consent Agreement 
requires that Abrika divest its rights and assets relating to generic 
isradipine capsules to Cobalt.
    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. A proposed acquirer of divested 
assets must not itself present competitive problems.
    Cobalt, which specializes in the sale and marketing of generic 
pharmaceuticals, is the United States arm of the Arrow Group, a private 
multinational that employs over 700 individuals. The Arrow Group has 
experience in the development, manufacturing, and sale of 
pharmaceuticals and has production facilities in Canada, Malta, 
Australia and Brazil. Cobalt is an acceptable acquirer of generic 
isradipine because it has experience in distributing and marketing 
generic pharmaceutical products in the United States. Currently, the 
company has received FDA approval for the sale of nine generic 
products. The acquisition by Cobalt does not present a competitive 
problem in the generic isradipine market because Cobalt currently does 
not participate in the market and has no independent plans to enter. 
With its resources, sales and marketing capabilities, and experience 
with generic products, Cobalt should be successful in restoring the 
competition that would be lost if the proposed Actavis/Abrika 
transaction were to proceed unremedied.
    If the Commission determines that Cobalt is not an acceptable 
acquirer of the assets to be divested, or that the manner of the 
divestitures to Cobalt is not acceptable, the parties must unwind the 
sale and divest the assets within six (6) months of the date the Order 
becomes final to another Commission-approved acquirer. If the parties 
fail to divest within six (6) months, the Commission may appoint a 
trustee to divest the generic isradipine capsule assets.
    The proposed remedy contains provisions to ensure that the 
divestitures are successful. Abrika's isradipine product is 
manufactured for Abrika by a third-party manufacturer. As part of the 
divestiture, Abrika will transfer its supply arrangement to Cobalt. 
Actavis and Abrika will transfer all confidential business information 
related to Abrika's isradipine product to Cobalt. Finally, Actavis and 
Abrika will provide technical assistance to Cobalt to allow it to 
manufacture isradipine in substantially the same manner and quality 
employed or achieved by Abrika.
    The Commission has appointed Denise F. Smart of Smart Consulting 
Group, LLC as the Interim Monitor to oversee the asset transfer and to 
ensure Actavis and Abrika's compliance with all of the provisions of 
the proposed Consent Agreement. Ms. Smart has over twenty years of 
experience in the pharmaceutical industry. Her experience includes 
providing consulting services in healthcare business development and 
regulatory compliance to major pharmaceutical companies, biotechnology 
companies and medical device companies. In order to ensure that the 
Commission remains informed about the status of the proposed 
divestitures and the transfers of assets, the proposed Consent 
Agreement requires Actavis and Abrika to file reports with the 
Commission periodically until the divestitures and transfers are 
accomplished.
    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. E7-7478 Filed 4-19-07; 8:45 am]
BILLING CODE 6750-01-P