Valeant Pharmaceuticals International, Inc.; Analysis of Agreement Containing Consent Order to Aid Public Comment, 78258-78259 [2011-32217]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Notices]
[Pages 78258-78259]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32217]


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FEDERAL TRADE COMMISSION

[File No. 111 0216]


Valeant Pharmaceuticals International, Inc.; Analysis of 
Agreement Containing Consent Order 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 12, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Valeant J&J, File No. 
111 0216'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/valeantjohnsonconsent, by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
D), 600 Pennsylvania Avenue NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Jacqueline K. Mendel (202) 326-2603), 
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 December 12, 2011), on the World Wide Web, at https://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.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 12, 
2012. Write ``Valeant J&J, File No. 111 0216'' on your comment. Your 
comment B including your name and your state B will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at https://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is 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 FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/valeantjohnsonconsent by following the instructions on the web-
based form. If this Notice appears at https://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Valeant J&J, File No. 
111 0216'' on your comment and on the envelope, and mail or deliver it 
to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW, 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at https://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before January 12, 2012. You can find more 
information, including routine uses permitted by the Privacy Act, in

[[Page 78259]]

the Commission's privacy policy, at https://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order to Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Order (``Consent 
Agreement'') from Valeant Pharmaceuticals International, Inc. 
(``Valeant''), which is designed to remedy the anticompetitive effects 
of Valeant's acquisition of the Ortho Dermatologics division of Janssen 
Pharmaceuticals, Inc. (``Janssen''), a wholly owned subsidiary of 
Johnson & Johnson.
    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'').
    Valeant intends to acquire Ortho Dermatologics from Janssen, a 
Johnson & Johnson company, in a transaction valued at approximately 
$345 million. Both parties sell topical pharmaceuticals in the United 
States. 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 FTC Act, as 
amended, 15 U.S.C. 45, in the market for tretinoin emollient cream. The 
proposed Consent Agreement remedies the loss of competition that would 
result from the merger in this market. Specifically, the Consent 
Agreement requires that Valeant return the marketing rights to two 
pharmaceutical products, Refissa, a branded tretinoin emollient cream, 
and a generic tretinoin emollient cream, to Spear Pharmaceuticals 
(``Spear''), the company that owns both products.

II. The Products and the Structure of the Market

    Valeant's proposed acquisition of Ortho Dermatologics from Johnson 
& Johnson would create a monopoly in the market for tretinoin emollient 
cream. Tretinoin emollient cream is a topical retinoid cream used for 
the treatment of fine line wrinkles (retinoids are chemical compounds 
derived from Vitamin A, most commonly used in the treatment of acne, 
but also used to treat fine line wrinkles). This market includes 
branded and generic tretinoin emollient cream, and is highly 
concentrated. Pursuant to a co-marketing agreement between Valeant and 
Spear Pharmaceuticals, Valeant markets branded Refissa tretinoin 
emollient cream as well as a generic tretinoin emollient cream. Johnson 
& Johnson's Renova is the only other tretinoin emollient cream product 
on the market. The proposed acquisition would create a monopoly in the 
market for tretinoin emollient cream in the United States.

III. Entry

    As with most pharmaceutical products, entry into the manufacture 
and sale of tretinoin emollient cream is difficult, expensive and time 
consuming. Developing and obtaining U.S. Food and Drug Administration 
(``FDA'') approval for the manufacture and sale of topical 
pharmaceuticals takes at least two years due to substantial regulatory, 
technological and intellectual property barriers. Moreover, entry is 
not likely because the relevant market is relatively small, providing 
limited sales opportunities relative to the cost of entry for any 
potential entrant.

IV. Effects of the Acquisition

    The proposed acquisition would cause significant anticompetitive 
harm in the U.S. market for tretinoin emollient cream by eliminating 
actual, direct and substantial competition between Valeant and Johnson 
& Johnson. The evidence indicates that the loss of head to head 
competition between Renova and the products co-marketed by Valeant 
(Refissa and generic tretinoin emollient cream) would result in higher 
prices for tretinoin emollient cream.

V. The Consent Agreement

    The proposed Consent Agreement would remedy the competitive 
concerns raised by the proposed acquisition by requiring that (1) 
Valeant terminate its agreement with Spear Pharmaceuticals, returning 
all its marketing rights to Refissa and generic tretinoin emollient 
cream and allowing Spear to take over its role in the market and (2) 
Valeant and Johnson & Johnson take steps to ensure that confidential 
business information relating to Refissa and generic tretinoin 
emollient cream will not be obtained or used by Valeant.
    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 Consent Agreement or to modify 
its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-32217 Filed 12-15-11; 8:45 am]
BILLING CODE 6750-01-P