Teva Pharmaceutical Industries Ltd. and Barr Pharmaceuticals, Inc; Analysis of Agreement Containing Consent Orders To Aid Public Comment, 79486-79489 [E8-30831]
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79486
Federal Register / Vol. 73, No. 249 / Monday, December 29, 2008 / Notices
The Commission therefore determines
that the maximum allowable charge for
the year 2009 will be $11.00.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8–30830 Filed 12–24–08: 8:45 am]
BILLING CODE 6750–01–S
FEDERAL TRADE COMMISSION
[File No. 081 0224]
Teva Pharmaceutical Industries Ltd.
and Barr Pharmaceuticals, Inc;
Analysis of Agreement Containing
Consent Orders To Aid Public
Comment
Federal Trade Commission.
Proposed Consent Agreement.
AGENCY:
ACTION:
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.
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DATES: Comments must be received on
or before January 19, 2008
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘Teva-Barr,
File No. 081 0224,’’ 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, N.W.,
Washington, D.C. 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
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).
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precautions. Comments that do not
contain any nonpublic information may
instead be filed in electronic form by
following the instructions on the webbased form at (https://
secure.commentworks.com/ftcTevaBarr). To ensure that the
Commission considers an electronic
comment, you must file it on that webbased form.
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
website, to the extent practicable, at
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 website. 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.shtm).
FOR FURTHER INFORMATION CONTACT:
Stephanie C. Bovee, FTC Bureau of
Competition, 600 Pennsylvania Avenue,
NW, Washington, D.C. 20580, (202) 3262083.
SUPPLEMENTARY INFORMATION: Pursuant
to section 6(f) of the Federal Trade
Commission Act, 38 Stat. 721, 15 U.S.C.
46(f), and § 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 December 19, 2008), on
the World Wide Web, at (https://
www.ftc.gov/os/2008/12/index.htm). A
paper copy can be obtained from the
FTC Public Reference Room, Room 130H, 600 Pennsylvania Avenue, NW,
Washington, D.C. 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.
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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 Teva Pharmaceutical
Industries Ltd. (‘‘Teva’’) and Barr
Pharmaceuticals Inc. (‘‘Barr’’) that is
designed to remedy the anticompetitive
effects of the acquisition of Barr by
Teva. Under the terms of the proposed
Consent Agreement, the companies
would be required to assign and divest
to Watson Pharmaceuticals (‘‘Watson’’)
Teva’s rights and assets necessary to
manufacture and market generic: (1)
chlorzoxazone tablets; (2) deferoxamine
injection; (3) fluoxetine weekly
capsules; (4) carboplatin injection; and
(5) metronidazole tablets. The Consent
Agreement also requires the companies
to assign and divest to Watson all of
Barr’s rights and assets necessary to
manufacture and market generic: (1)
metoclopramide hydrochloride (‘‘HCl’’)
tablets; (2) cyclosporine liquid; (3)
cyclosporine capsules; (4) desmopressin
acetate tablets; (5) epoprostenol sodium
(freeze-dried powder) injection
(‘‘epop’’); (6) flutamide capsules; (7)
glipizide/metformin HCl tablets; (8)
mirtazapine orally disintegrating tablets
(‘‘ODT’’); (9) tamoxifen citrate tablets;
and (10) tetracycline HCl capsules. In
addition, the proposed Consent
Agreement requires the companies to
divest Teva’s rights and assets necessary
to manufacture and market generic
trazodone HCl tablets and thirteen oral
contraceptive products to Qualitest
Pharmaceuticals (‘‘Qualitest’’).
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 Agreement and Plan of
Merger dated July 18, 2008, Teva
proposes to acquire all of the issued and
outstanding shares of Barr for
approximately $7.4 billion, plus the
assumption of $1.5 billion of net debt,
for approximately $8.9 billion. 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
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U.S.C. § 45, by lessening competition in
the U.S. markets for the manufacture
and sale of the following generic
pharmaceutical products: (1)
tetracycline HCl capsules; (2)
chlorzoxazone tablets; (3) desmopressin
acetate tablets; (4) metoclopramide HCl
tablets; (5) carboplatin injection; (6)
tamoxifen citrate tablets; (7)
metronidazole tablets; (8) trazodone HCl
tablets; (9) glipizide/metformin HCl
tablets; (10) cyclosporine liquid; (11)
cyclosporine capsules; (12) flutamide
capsules; (13) mirtazapine ODT; (14)
deferoxamine injection; (15) epop; (16)
weekly fluoxetine capsules; and (17)
thirteen generic oral contraceptive
markets (collectively, the ‘‘Products’’).
The proposed Consent Agreement will
remedy the alleged violations by
replacing the lost competition that
would result from the acquisition in
each of the markets.
The Products and Structure of the
Markets
The proposed acquisition of Barr by
Teva would strengthen Teva’s
worldwide position in generic
pharmaceuticals and provide Teva with
a stronger pipeline of generic products.
The transaction would reduce the
number of competing generic suppliers
in each of the relevant markets. 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. Generic pharmaceutical
customers are not likely to switch to the
equivalent branded product because
they are priced significantly higher than
the generic products. After more than
one generic product is introduced,
competition among the generic
competitors drives pricing, and the
branded product’s pricing largely
becomes competitively irrelevant.
In the markets for generic tetracycline
HCl tablets, chlorzoxazone tablets, and
desmopressin acetate tablets, Teva and
Barr are the only companies
manufacturing and selling products in
the United States. Tetracycline HCl is an
old, broad-spectrum antibiotic used now
primarily for the treatment of acne and
rosacea. Chlorzoxazone is a centrally
acting muscle relaxant used to treat
muscle spasms. Desmopressin acetate is
a synthetic replacement for an
antidiuretic hormone that reduces urine
production during sleep and is used to
treat bed-wetting in children. Because
Teva and Barr are the only suppliers of
these generic products in the United
States, the proposed acquisition creates
a monopoly in each of these markets.
In the generic tamoxifen citrate and
cyclosporine liquid markets, the
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proposed acquisition reduces the
number of competitors from three to
two. Tamoxifen citrate is a selective
estrogen receptor modulator that is used
in the treatment of breast cancer.
Cyclosporine is an immunosuppressant
drug used to prevent the rejection of
transplanted organs. Combined, Teva
and Barr, currently account for 73
percent of the generic tamoxifen citrate
market and 55 percent of the generic
cyclosporine liquid market.
Teva’s proposed acquisition of Barr
would reduce the number of
competitors from four to three in the
following generic markets: (1)
metoclopramide HCl tablets; (2)
carboplatin injection; (3) metronidazole
tablets; (4) trazodone HCl tablets; (5)
cyclosporine capsules; (6) flutamide
capsules; (7) glipizide/metformin HCl
tablets; (8) deferoxamine injection; and
(9) mirtazapine ODT. The structure of
each of these markets is as follows:
∑ Metoclopramide HCl is a dopamine
receptor antagonist used to treat
nausea and vomiting as well as
gastroesophageal reflux disease
(‘‘GERD’’). In the generic
metoclopramide HCl market, Teva
and Barr are two of only four
suppliers supplying all dosage forms
of metoclopramide HCl. Qualitest and
Mutual/URL Pharmaceuticals
(‘‘Mutual’’) are the remaining two
suppliers. A combined Teva and Barr
would possess 82 percent of the
overall generic metoclopramide HCl
market based on current sales.
∑ Carboplatin, the generic version of
Bristol-Myers Squibb Company’s
(‘‘BMS’’) Paraplatin®, is a
chemotherapy drug used to treat a
variety of cancers, mainly ovarian,
lung, head and neck cancers. Teva
and Barr are two of the leading
suppliers of generic carboplatin
injection with a combined market
share of 60 percent. APP
Pharmaceuticals and Bedford
Laboratories (‘‘Bedford’’) are the two
remaining suppliers in the generic
carboplatin injection market with 11
percent and 29 percent of the market,
respectively.
∑ Metronidazole is an anti-infective
used in the treatment of a variety of
bacterial infections. Barr is the market
leader in the generic metronidazole
market with 50 percent market share.
Teva is close behind with 39 percent
of the market. Mutual and Amneal
Pharmaceuticals are the only other
suppliers with 4 percent and 1
percent of the market, respectively.
Therefore, the proposed acquisition
combines two of the most
competitively significant suppliers of
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∑
∑
∑
∑
∑
79487
generic metronidazole, resulting in a
combined market share of 89 percent.
Trazodone is an antidepressant with
a sedative effect. In the generic
trazodone market, the proposed
acquisition would result in a
combined market share of 75 percent.
Apotex Group is the only other
competitively significant supplier
with 22 percent of the market. The
fourth supplier—Watson—has had
limited success in this market, having
captured only a 3 percent market
share to date.
Cyclosporine is an
immunosuppressant drug used to
prevent the rejection of transplanted
organs. In the generic cyclosprine
capsules market, Teva and Barr have
roughly equal market shares and their
post-acquisition market share would
be 41 percent. Abbott Laboratories is
the market leader with 51 percent of
the market. The fourth supplier—
Sandoz Inc. (‘‘Sandoz’’)— represents
approximately 8 percent of the
market.
Flutamide is an anti-androgen drug
used to treat prostate cancer. Teva,
Barr, Par Pharmaceutical Companies
(‘‘Par’’), and Sandoz are the four
suppliers of generic flutamide.
Sandoz is the market leader with 34
percent of the market. Teva has 28
percent of the market, Par has 24
percent, and Barr has 14 percent.
Consequently, the proposed
acquisition would result in a
combined market share of 42 percent.
Glipizide/Metformin, the generic
version of BMS’s Metaglip®, is
commonly prescribed as a first line
treatment for diabetes. Mylan
Pharmaceuticals (‘‘Mylan’’), Sandoz,
Teva, and Barr are the four suppliers
of generic glipizide/metformin.
Sandoz is the market leader with 37
percent. Barr and Teva have roughly
equal market shares of 25 and 26
percent, respectively. The fourth
supplier—Mylan—has the smallest
market share with 12 percent. Thus,
Teva’s proposed acquisition of Barr
would result in a post acquisition
market share of 51 percent.
Deferoxamine, the generic version of
Novartis International AG’s Desferal®,
is a chelating agent used to remove
excess iron from the body. In the
generic deferoxamine market, a
combined Teva and Barr would
possess 16 percent of the market.
Hospira Inc. is the market leader with
73 percent market share. The
remaining supplier—Bedford—is a
small competitor as reflected by its 11
percent share of the market. Although
the combined share of Teva and Barr
is only 16 percent, the proposed
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Federal Register / Vol. 73, No. 249 / Monday, December 29, 2008 / Notices
transaction would combine two of
only four companies offering generic
deferoxamine injection in the United
States. As discussed in Effects, below,
the number of suppliers is the driving
factor for prices in generic markets.
∑ Mirtazapine is an antidepressant used
to treat moderate to severe depression.
Only four companies currently supply
generic mirtazapine in the United
States—Teva, Barr, Prasco
Laboratories (‘‘Prasco’’), and
Aurobindo Pharma (‘‘Aurobindo’’).
Prasco is the market leader with a 49
percent market share. Barr has 26
percent of the market, and Teva has
10 percent of the market. Aurobindo
is the smallest competitor with only 8
percent of the market. Hence, the
proposed acquisition would result in
a combined market share of 36
percent.
In two product markets—epop and
fluoxetine weekly capsules—the
proposed acquisition would eliminate
important and significant future
competition. Epop is used to treat severe
primary pulmonary hypertension. Epop
is a new generic market and Teva is
currently the only generic epop
supplier. Barr has an epop product in
development. Fluoxetine weekly
capsules are a widely-prescribed
antidepressant. Both Teva and Barr have
generic products in development for the
fluoxetine weekly capsules market.
There are few firms that are capable of,
and interested in, entering these
markets.
Oral contraceptives are pills taken by
mouth to prevent ovulation and
pregnancy. They are the most common
method of reversible birth control, used
by 82 percent of women in the United
States at some point during their
reproductive years.
The thirteen oral contraceptive
markets include two markets where
both Teva and Barr participate, ten
markets where Barr participates and
Teva has a product in development and
one market where both Teva and Barr
have products in development. The two
markets where both Barr and Teva
currently participate—generic OrthoCyclen® and generic Ortho TriCyclen®—are already highly
concentrated. A combined Teva and
Barr would have 68 percent of the
generic Ortho-Cyclen® market and 51
percent of the generic Ortho TriCyclen® market. Watson is the only
other supplier in each of these markets.
Barr also competes in ten oral
contraceptive markets where Teva is
developing a competing product. These
markets include generic products that
are equivalent to Ortho-Cept®,
Mircette®, Triphasil®, Alesse®,
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OrthoNovum® 1-35, OthroNovum® 7/
7/7, Loestrin® FE (1mg/.02 mg & 1.5
mg/.03 mg), Loestrin® FE (1mg/.2 mg),
Loestrin® FE 24, and Ovcon® 35. In
each of these relevant markets, Teva is
one of a limited number of firms capable
of developing a generic oral
contraceptive product that would
compete in each of these markets, and
is well-positioned to enter the markets
in a timely manner. Both Teva and Barr
are developing generic products
equivalent to Ortho Tri-Cyclen® Lo 28
and are two of a limited number of firms
with this product in development.
Entry
Entry into the markets for the
manufacture and sale of the Products
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 Food and Drug
Administration (‘‘FDA’’) drug approval
requirements takes at least two years.
Entry would not be likely because many
of the relevant markets are relatively
small and in decline, so the limited
sales opportunities available to a new
entrant would likely be insufficient to
warrant the time and investment
necessary to enter.
Effects
The proposed acquisition would
cause significant anticompetitive harm
to consumers in the U.S. markets for the
manufacture and sale of each of the
generic markets listed above. In generic
pharmaceutical markets, pricing is
heavily influenced by the number of
competitors that participate in a given
market. Here, the evidence shows that
the prices of the generic pharmaceutical
products at issue decrease with the
entry of each additional competitor.
Evidence gathered during the
investigation confirms that pricing for
the generic pharmaceutical products at
issue in the transaction is driven by the
number firms that compete in the
markets. Customers consistently state
that the price of a generic
pharmaceutical decreases with the entry
of the second, third and even fourth
competitor. The evidence also indicates
that the presence of four significant
competitors allows customers to
negotiate lower prices than is the case
where there are fewer firms. The
proposed transaction would eliminate
one of at most four competitors in each
of the relevant markets and would cause
significant anticompetitive harm to
consumers in the U.S. markets by
eliminating actual, direct, and
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substantial competition between Teva
and Barr and by increasing the
likelihood that customers will pay
higher prices.
The competitive concerns can be
characterized as both unilateral and
coordinated in nature. The homogenous
nature of the products involved, the
minimal incentives to deviate, and the
relatively predictable prospects of
gaining new business all indicate that
the firms in the market will find it
profitable to coordinate their pricing.
The impact that a reduction in the
number of firms would have on pricing
can also be explained in terms of
unilateral effects, as the likelihood that
the merging parties would be the first
and second choices in a significant
number of bidding situations is
enhanced where the number of firms
participating in the market decreases
substantially.
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, Teva and Barr
are required to divest certain rights and
assets related to the Products to a
Commission-approved acquirer no later
than ten days after the acquisition.
Specifically, the proposed Consent
Agreement requires that Teva divest the
oral contraceptive products and
trazodone to Qualitest and that Teva/
Barr divest the remainder of the
Products to Watson.
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.
Qualitest and Watson are wellpositioned to manufacture and market
their respective acquired Products and
to compete effectively in those markets.
Both Qualitest and Watson develop,
manufacturer, sell, and distribute
generic pharmaceuticals within the
United States. Moreover, the
divestitures to both companies do not
present competitive problems of their
own because neither competes in those
markets. With their resources,
capabilities, strong reputation, and
experience marketing generic products,
the two companies are expected to
replicate the competition that would be
lost with the proposed acquisition.
If the Commission determines that
either Watson or Qualitest is not
acceptable acquirer of the assets to be
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Federal Register / Vol. 73, No. 249 / Monday, December 29, 2008 / Notices
divested, or that the manner of the
divestitures is not acceptable, the
parties must unwind the sale and divest
the assets within six months of the date
the Order becomes final to another
Commission-approved acquirer. If the
parties fail to divest within six months,
the Commission may appoint a trustee
to divest the Products.
The proposed remedy contains
several provisions to ensure that the
divestitures are successful. The Order
requires Teva and Barr to provide
transitional services to enable the
Commission-approved acquirers to
obtain all of the necessary approvals
from the FDA. These transitional
services include technology transfer
assistance to manufacture the Products
in substantially the same manner and
quality employed or achieved by Teva
or Barr. Most of the oral contraceptive
products had been divested to Teva
pursuant to a Commission Order in the
matter of Watson Pharmaceuticals, Inc./
Andrx Corporation, Docket No. C-4172
(October 31, 2006). This proposed D&O
does not relieve Watson of any of its
obligations pursuant to the Commission
Order issued in the above referenced
Watson/Andrx matter.
The Commission has appointed
William Rahe of Quantic Regulatory
Services, LLC (‘‘Quantic’’) to oversee the
asset transfer and to ensure Teva’s and
Barr’s compliance with all of the
provisions of the proposed Consent
Agreement. Mr. Rahe is a senior
consultant at Quantic and has several
years of experience in the
pharmaceutical industry. He is a highlyqualified expert on FDA regulatory
matters and currently advises Quantic
clients on achieving satisfactory
regulatory compliance and interfacing
with the FDA. 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 Teva and Barr 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.
OMB number, and OS document
identifier, to
Sherette.funncoleman@hhs.gov, or call
the Reports Clearance Office on (202)
690–6162. Written comments and
recommendations for the proposed
information collections must be directed
to the OS Paperwork Clearance Officer
at the above e-mail address within 60
days.
Proposed Project: Ensuring That
Department of Health and Human
Services Funds Do Not Support
Coercive or Discriminatory Policies or
Practices in Violation of Federal Law—
OMB No. 0990–NEW—Office of the
Secretary.
Abstract: The proposed information
collection is contained in the Final Rule
entitled, ‘‘Ensuring That Department of
Health and Human Services Funds Do
Not Support Coercive or Discriminatory
Policies or Practices in Violation of
Federal Law.’’ The purpose of this
collection is to ensure, by requiring
written certification of compliance
similar to other, existing certifications
currently made by funding recipients
and applicants, that recipients of
Department funds are aware of and
comply with the legal obligations
imposed on them by the Church
Amendments (42 U.S.C. 300a–7), Public
Health Service Act section 245 (42
U.S.C. 238n) and the Weldon
Amendment (Consolidated
Appropriations Act, 2008, Pub. L. 110–
161 Div. G section 508(d), 121 Stat.
1844, 2209). We estimate the universe
and number of entities that would be
required to certify to be 571,947. The act
of certification consists of reviewing the
certification language, reviewing
relevant entity policies and procedures,
and reviewing files before signing.
Although some entities may need to
sign a certification statement more than
once, we assume that the entity will
only carefully review the language,
procedures and their files before signing
the initial statement each year.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8–30831 Filed 12–24–08: 8:45 am]
BILLING CODE 6750–01–S
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
[Document Identifier: OS–0990–New]
Agency Information Collection
Request; 60-Day Public Comment
Request
Office of the Secretary, HHS.
In compliance with the requirement
of section 3506(c)(2)(A) of the
Paperwork Reduction Act of 1995, the
Office of the Secretary (OS), Department
of Health and Human Services, is
publishing the following summary of a
proposed information collection request
for public comment. Interested persons
are invited to send comments regarding
this burden estimate or any other aspect
of this collection of information,
including any of the following subjects:
(1) The necessity and utility of the
proposed information collection for the
proper performance of the agency’s
functions; (2) the accuracy of the
estimated burden; (3) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (4) the
use of automated collection techniques
or other forms of information
technology to minimize the information
collection burden.
To obtain copies of the supporting
statement and any related forms for the
proposed paperwork collections
referenced above, e-mail your request,
including your address, phone number,
AGENCY:
ESTIMATED ANNUALIZED BURDEN TABLE
Number of
respondents
dwashington3 on PROD1PC60 with NOTICES
Type of respondent
Hospitals (less than 100 beds) ........................................................................
Hospitals (less than 100 beds) ........................................................................
Hospitals (200–500 beds) ................................................................................
Hospitals (more than 500 beds) ......................................................................
Nursing Homes (less than 50 beds) ................................................................
Nursing Homes (50–99 beds) .........................................................................
Nursing Homes (99—199 beds) ......................................................................
Nursing Homes (more than 200 beds) ............................................................
Physicians Offices ...........................................................................................
Offices of Other Health Care Practitioners ......................................................
Outpatient Care Centers ..................................................................................
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Number of
responses per
respondent
2403
1129
1160
244
2388
5819
6877
1037
234200
115378
26901
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1
1
1
29DEN1
Average
burden hours
per response
30/60
30/60
30/60
30/60
30/60
30/60
30/60
30/60
30/60
30/60
30/60
Total burden
hours
1202
565
580
122
1194
2910
3439
519
117100
57689
13451
]]>Agencies
[Federal Register Volume 73, Number 249 (Monday, December 29, 2008)]
[Notices]
[Pages 79486-79489]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-30831]
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FEDERAL TRADE COMMISSION
[File No. 081 0224]
Teva Pharmaceutical Industries Ltd. and Barr Pharmaceuticals,
Inc; 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 January 19, 2008
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Teva-Barr, File No. 081 0224,'' 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, N.W., Washington, D.C. 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 by following the instructions on the web-based form at (https://
secure.commentworks.com/ftc-TevaBarr). To ensure that the Commission
considers an electronic comment, you must file it on that web-based
form.
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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 Commission Rule 4.9(c),
16 CFR 4.9(c).
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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 website, to the extent
practicable, at 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 website. 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.shtm).
FOR FURTHER INFORMATION CONTACT: Stephanie C. Bovee, FTC Bureau of
Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, (202)
326-2083.
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 December 19, 2008), on the World Wide Web, at (https://www.ftc.gov/
os/2008/12/index.htm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 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 Teva Pharmaceutical Industries Ltd. (``Teva'') and
Barr Pharmaceuticals Inc. (``Barr'') that is designed to remedy the
anticompetitive effects of the acquisition of Barr by Teva. Under the
terms of the proposed Consent Agreement, the companies would be
required to assign and divest to Watson Pharmaceuticals (``Watson'')
Teva's rights and assets necessary to manufacture and market generic:
(1) chlorzoxazone tablets; (2) deferoxamine injection; (3) fluoxetine
weekly capsules; (4) carboplatin injection; and (5) metronidazole
tablets. The Consent Agreement also requires the companies to assign
and divest to Watson all of Barr's rights and assets necessary to
manufacture and market generic: (1) metoclopramide hydrochloride
(``HCl'') tablets; (2) cyclosporine liquid; (3) cyclosporine capsules;
(4) desmopressin acetate tablets; (5) epoprostenol sodium (freeze-dried
powder) injection (``epop''); (6) flutamide capsules; (7) glipizide/
metformin HCl tablets; (8) mirtazapine orally disintegrating tablets
(``ODT''); (9) tamoxifen citrate tablets; and (10) tetracycline HCl
capsules. In addition, the proposed Consent Agreement requires the
companies to divest Teva's rights and assets necessary to manufacture
and market generic trazodone HCl tablets and thirteen oral
contraceptive products to Qualitest Pharmaceuticals (``Qualitest'').
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 Agreement and Plan of Merger dated July 18, 2008,
Teva proposes to acquire all of the issued and outstanding shares of
Barr for approximately $7.4 billion, plus the assumption of $1.5
billion of net debt, for approximately $8.9 billion. 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. Sec. 18,
and Section 5 of the Federal Trade Commission Act, as amended, 15
[[Page 79487]]
U.S.C. Sec. 45, by lessening competition in the U.S. markets for the
manufacture and sale of the following generic pharmaceutical products:
(1) tetracycline HCl capsules; (2) chlorzoxazone tablets; (3)
desmopressin acetate tablets; (4) metoclopramide HCl tablets; (5)
carboplatin injection; (6) tamoxifen citrate tablets; (7) metronidazole
tablets; (8) trazodone HCl tablets; (9) glipizide/metformin HCl
tablets; (10) cyclosporine liquid; (11) cyclosporine capsules; (12)
flutamide capsules; (13) mirtazapine ODT; (14) deferoxamine injection;
(15) epop; (16) weekly fluoxetine capsules; and (17) thirteen generic
oral contraceptive markets (collectively, the ``Products''). The
proposed Consent Agreement will remedy the alleged violations by
replacing the lost competition that would result from the acquisition
in each of the markets.
The Products and Structure of the Markets
The proposed acquisition of Barr by Teva would strengthen Teva's
worldwide position in generic pharmaceuticals and provide Teva with a
stronger pipeline of generic products.
The transaction would reduce the number of competing generic
suppliers in each of the relevant markets. 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. Generic pharmaceutical customers are not likely to switch to
the equivalent branded product because they are priced significantly
higher than the generic products. After more than one generic product
is introduced, competition among the generic competitors drives
pricing, and the branded product's pricing largely becomes
competitively irrelevant.
In the markets for generic tetracycline HCl tablets, chlorzoxazone
tablets, and desmopressin acetate tablets, Teva and Barr are the only
companies manufacturing and selling products in the United States.
Tetracycline HCl is an old, broad-spectrum antibiotic used now
primarily for the treatment of acne and rosacea. Chlorzoxazone is a
centrally acting muscle relaxant used to treat muscle spasms.
Desmopressin acetate is a synthetic replacement for an antidiuretic
hormone that reduces urine production during sleep and is used to treat
bed-wetting in children. Because Teva and Barr are the only suppliers
of these generic products in the United States, the proposed
acquisition creates a monopoly in each of these markets.
In the generic tamoxifen citrate and cyclosporine liquid markets,
the proposed acquisition reduces the number of competitors from three
to two. Tamoxifen citrate is a selective estrogen receptor modulator
that is used in the treatment of breast cancer. Cyclosporine is an
immunosuppressant drug used to prevent the rejection of transplanted
organs. Combined, Teva and Barr, currently account for 73 percent of
the generic tamoxifen citrate market and 55 percent of the generic
cyclosporine liquid market.
Teva's proposed acquisition of Barr would reduce the number of
competitors from four to three in the following generic markets: (1)
metoclopramide HCl tablets; (2) carboplatin injection; (3)
metronidazole tablets; (4) trazodone HCl tablets; (5) cyclosporine
capsules; (6) flutamide capsules; (7) glipizide/metformin HCl tablets;
(8) deferoxamine injection; and (9) mirtazapine ODT. The structure of
each of these markets is as follows:
Metoclopramide HCl is a dopamine receptor antagonist used to
treat nausea and vomiting as well as gastroesophageal reflux disease
(``GERD''). In the generic metoclopramide HCl market, Teva and Barr are
two of only four suppliers supplying all dosage forms of metoclopramide
HCl. Qualitest and Mutual/URL Pharmaceuticals (``Mutual'') are the
remaining two suppliers. A combined Teva and Barr would possess 82
percent of the overall generic metoclopramide HCl market based on
current sales.
Carboplatin, the generic version of Bristol-Myers Squibb
Company's (``BMS'') Paraplatin[reg], is a chemotherapy drug used to
treat a variety of cancers, mainly ovarian, lung, head and neck
cancers. Teva and Barr are two of the leading suppliers of generic
carboplatin injection with a combined market share of 60 percent. APP
Pharmaceuticals and Bedford Laboratories (``Bedford'') are the two
remaining suppliers in the generic carboplatin injection market with 11
percent and 29 percent of the market, respectively.
Metronidazole is an anti-infective used in the treatment of a
variety of bacterial infections. Barr is the market leader in the
generic metronidazole market with 50 percent market share. Teva is
close behind with 39 percent of the market. Mutual and Amneal
Pharmaceuticals are the only other suppliers with 4 percent and 1
percent of the market, respectively. Therefore, the proposed
acquisition combines two of the most competitively significant
suppliers of generic metronidazole, resulting in a combined market
share of 89 percent.
Trazodone is an antidepressant with a sedative effect. In the
generic trazodone market, the proposed acquisition would result in a
combined market share of 75 percent. Apotex Group is the only other
competitively significant supplier with 22 percent of the market. The
fourth supplier--Watson--has had limited success in this market, having
captured only a 3 percent market share to date.
Cyclosporine is an immunosuppressant drug used to prevent the
rejection of transplanted organs. In the generic cyclosprine capsules
market, Teva and Barr have roughly equal market shares and their post-
acquisition market share would be 41 percent. Abbott Laboratories is
the market leader with 51 percent of the market. The fourth supplier--
Sandoz Inc. (``Sandoz'')-- represents approximately 8 percent of the
market.
Flutamide is an anti-androgen drug used to treat prostate
cancer. Teva, Barr, Par Pharmaceutical Companies (``Par''), and Sandoz
are the four suppliers of generic flutamide. Sandoz is the market
leader with 34 percent of the market. Teva has 28 percent of the
market, Par has 24 percent, and Barr has 14 percent. Consequently, the
proposed acquisition would result in a combined market share of 42
percent.
Glipizide/Metformin, the generic version of BMS's
Metaglip[reg], is commonly prescribed as a first line treatment for
diabetes. Mylan Pharmaceuticals (``Mylan''), Sandoz, Teva, and Barr are
the four suppliers of generic glipizide/metformin. Sandoz is the market
leader with 37 percent. Barr and Teva have roughly equal market shares
of 25 and 26 percent, respectively. The fourth supplier--Mylan--has the
smallest market share with 12 percent. Thus, Teva's proposed
acquisition of Barr would result in a post acquisition market share of
51 percent.
Deferoxamine, the generic version of Novartis International
AG's Desferal[reg], is a chelating agent used to remove excess iron
from the body. In the generic deferoxamine market, a combined Teva and
Barr would possess 16 percent of the market. Hospira Inc. is the market
leader with 73 percent market share. The remaining supplier--Bedford--
is a small competitor as reflected by its 11 percent share of the
market. Although the combined share of Teva and Barr is only 16
percent, the proposed
[[Page 79488]]
transaction would combine two of only four companies offering generic
deferoxamine injection in the United States. As discussed in Effects,
below, the number of suppliers is the driving factor for prices in
generic markets.
Mirtazapine is an antidepressant used to treat moderate to
severe depression. Only four companies currently supply generic
mirtazapine in the United States--Teva, Barr, Prasco Laboratories
(``Prasco''), and Aurobindo Pharma (``Aurobindo''). Prasco is the
market leader with a 49 percent market share. Barr has 26 percent of
the market, and Teva has 10 percent of the market. Aurobindo is the
smallest competitor with only 8 percent of the market. Hence, the
proposed acquisition would result in a combined market share of 36
percent.
In two product markets--epop and fluoxetine weekly capsules--the
proposed acquisition would eliminate important and significant future
competition. Epop is used to treat severe primary pulmonary
hypertension. Epop is a new generic market and Teva is currently the
only generic epop supplier. Barr has an epop product in development.
Fluoxetine weekly capsules are a widely-prescribed antidepressant. Both
Teva and Barr have generic products in development for the fluoxetine
weekly capsules market. There are few firms that are capable of, and
interested in, entering these markets.
Oral contraceptives are pills taken by mouth to prevent ovulation
and pregnancy. They are the most common method of reversible birth
control, used by 82 percent of women in the United States at some point
during their reproductive years.
The thirteen oral contraceptive markets include two markets where
both Teva and Barr participate, ten markets where Barr participates and
Teva has a product in development and one market where both Teva and
Barr have products in development. The two markets where both Barr and
Teva currently participate--generic Ortho-Cyclen[reg] and generic Ortho
Tri-Cyclen[reg]--are already highly concentrated. A combined Teva and
Barr would have 68 percent of the generic Ortho-Cyclen[reg] market and
51 percent of the generic Ortho Tri-Cyclen[reg] market. Watson is the
only other supplier in each of these markets.
Barr also competes in ten oral contraceptive markets where Teva is
developing a competing product. These markets include generic products
that are equivalent to Ortho-Cept[reg], Mircette[reg], Triphasil[reg],
Alesse[reg], OrthoNovum[reg] 1-35, OthroNovum[reg] 7/7/7, Loestrin[reg]
FE (1mg/.02 mg & 1.5 mg/.03 mg), Loestrin[reg] FE (1mg/.2 mg),
Loestrin[reg] FE 24, and Ovcon[reg] 35. In each of these relevant
markets, Teva is one of a limited number of firms capable of developing
a generic oral contraceptive product that would compete in each of
these markets, and is well-positioned to enter the markets in a timely
manner. Both Teva and Barr are developing generic products equivalent
to Ortho Tri-Cyclen[reg] Lo 28 and are two of a limited number of firms
with this product in development.
Entry
Entry into the markets for the manufacture and sale of the Products
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 Food and Drug
Administration (``FDA'') drug approval requirements takes at least two
years. Entry would not be likely because many of the relevant markets
are relatively small and in decline, so the limited sales opportunities
available to a new entrant would likely be insufficient to warrant the
time and investment necessary to enter.
Effects
The proposed acquisition would cause significant anticompetitive
harm to consumers in the U.S. markets for the manufacture and sale of
each of the generic markets listed above. In generic pharmaceutical
markets, pricing is heavily influenced by the number of competitors
that participate in a given market. Here, the evidence shows that the
prices of the generic pharmaceutical products at issue decrease with
the entry of each additional competitor.
Evidence gathered during the investigation confirms that pricing
for the generic pharmaceutical products at issue in the transaction is
driven by the number firms that compete in the markets. Customers
consistently state that the price of a generic pharmaceutical decreases
with the entry of the second, third and even fourth competitor. The
evidence also indicates that the presence of four significant
competitors allows customers to negotiate lower prices than is the case
where there are fewer firms. The proposed transaction would eliminate
one of at most four competitors in each of the relevant markets and
would cause significant anticompetitive harm to consumers in the U.S.
markets by eliminating actual, direct, and substantial competition
between Teva and Barr and by increasing the likelihood that customers
will pay higher prices.
The competitive concerns can be characterized as both unilateral
and coordinated in nature. The homogenous nature of the products
involved, the minimal incentives to deviate, and the relatively
predictable prospects of gaining new business all indicate that the
firms in the market will find it profitable to coordinate their
pricing. The impact that a reduction in the number of firms would have
on pricing can also be explained in terms of unilateral effects, as the
likelihood that the merging parties would be the first and second
choices in a significant number of bidding situations is enhanced where
the number of firms participating in the market decreases
substantially.
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, Teva and Barr are required to divest
certain rights and assets related to the Products to a Commission-
approved acquirer no later than ten days after the acquisition.
Specifically, the proposed Consent Agreement requires that Teva divest
the oral contraceptive products and trazodone to Qualitest and that
Teva/Barr divest the remainder of the Products to Watson.
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.
Qualitest and Watson are well-positioned to manufacture and market
their respective acquired Products and to compete effectively in those
markets. Both Qualitest and Watson develop, manufacturer, sell, and
distribute generic pharmaceuticals within the United States. Moreover,
the divestitures to both companies do not present competitive problems
of their own because neither competes in those markets. With their
resources, capabilities, strong reputation, and experience marketing
generic products, the two companies are expected to replicate the
competition that would be lost with the proposed acquisition.
If the Commission determines that either Watson or Qualitest is not
acceptable acquirer of the assets to be
[[Page 79489]]
divested, or that the manner of the divestitures is not acceptable, the
parties must unwind the sale and divest the assets within six months of
the date the Order becomes final to another Commission-approved
acquirer. If the parties fail to divest within six months, the
Commission may appoint a trustee to divest the Products.
The proposed remedy contains several provisions to ensure that the
divestitures are successful. The Order requires Teva and Barr to
provide transitional services to enable the Commission-approved
acquirers to obtain all of the necessary approvals from the FDA. These
transitional services include technology transfer assistance to
manufacture the Products in substantially the same manner and quality
employed or achieved by Teva or Barr. Most of the oral contraceptive
products had been divested to Teva pursuant to a Commission Order in
the matter of Watson Pharmaceuticals, Inc./Andrx Corporation, Docket
No. C-4172 (October 31, 2006). This proposed D&O does not relieve
Watson of any of its obligations pursuant to the Commission Order
issued in the above referenced Watson/Andrx matter.
The Commission has appointed William Rahe of Quantic Regulatory
Services, LLC (``Quantic'') to oversee the asset transfer and to ensure
Teva's and Barr's compliance with all of the provisions of the proposed
Consent Agreement. Mr. Rahe is a senior consultant at Quantic and has
several years of experience in the pharmaceutical industry. He is a
highly-qualified expert on FDA regulatory matters and currently advises
Quantic clients on achieving satisfactory regulatory compliance and
interfacing with the FDA. 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 Teva and
Barr 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. E8-30831 Filed 12-24-08: 8:45 am]
BILLING CODE 6750-01-S
