Mylan, Inc., Agila Specialties Global Pte. Limited, Agila Specialties Private Limited and Strides Arcolab Limited; Analysis of Agreement Containing Consent Orders To Aid Public Comment, 61358-61361 [2013-24144]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61358-61361]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24144]


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FEDERAL TRADE COMMISSION

[File No. 131 0112]


Mylan, Inc., Agila Specialties Global Pte. Limited, Agila 
Specialties Private Limited and Strides Arcolab Limited; 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 October 28, 2013.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/mylanagilaconsent online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Mylan, File No. 131 
0112'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/mylanagilaconsent 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: Amy Posner (202-326-2614), FTC, Bureau 
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 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 September 26, 2013), 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 October 28, 
2013. Write ``Mylan, File No. 131 0112'' on your comment. Your 
comment--including your name and your state--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 privileged or confidential,'' as discussed 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

[[Page 61359]]

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/mylanagilaconsent 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 ``Mylan, File No. 131 
0112'' 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 October 28, 2013. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at https://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment 
Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Mylan Inc. (``Mylan''), Agila Specialties Global Pte. 
Limited and Agila Specialties Private Limited (collectively, 
``Agila''), and Strides Arcolab Limited (``Strides'') that is designed 
to remedy the anticompetitive effects that otherwise would have 
resulted in eleven generic injectable pharmaceutical markets from 
Mylan's proposed acquisition of Agila. Under the terms of the proposed 
Consent Agreement, Mylan is required to divest either Mylan or Agila/
Strides products as follows: (1) To Intas Pharmaceuticals Ltd. 
(``Intas''), Mylan's fluorouracil injection and methotrexate sodium 
preservative-free injection; (2) to JHP Pharmaceuticals, LLC (``JHP''), 
Mylan's etomidate injection, ganciclovir injection, meropenem 
injection, and mycophenolate mofetil injection and Agila/Strides' 
amiodarone hydrochloride injection and fomepizole injection; and (3) to 
Sagent Pharmaceuticals, Inc. (``Sagent''), Agila/Strides' 
acetylcysteine injection and mesna injection. In addition, Mylan is 
required to release all of its rights relating to labetalol 
hydrochloride injection to Gland Pharma Ltd. (``Gland'').
    The proposed Consent Agreement has been placed on the public record 
for thirty days for receipt of comments from interested persons. 
Comments received during this period will become part of the public 
record. After thirty days, the Commission will again evaluate the 
proposed Consent Agreement, along with the comments received, in order 
to make a final decision as to whether it should withdraw from the 
proposed Consent Agreement, or make final the Decision and Order 
(``Order'').
    Mylan proposes to acquire Agila for approximately $1.85 billion 
pursuant to a Sale and Purchase Agreement dated February 27, 2013 
(``Proposed Acquisition''). The Commission alleges in its Complaint 
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 
current and future competition in eleven generic injectable 
pharmaceutical product markets in the United States. The eleven product 
markets are: (1) Amiodarone hydrochloride injection; (2) etomidate 
injection; (3) fluorouracil injection; (4) labetalol hydrochloride 
injection; (5) mesna injection; (6) methotrexate sodium preservative-
free injection; (7) acetylcysteine injection; (8) fomepizole injection; 
(9) ganciclovir injection; (10) meropenem injection; and (11) 
mycophenolate mofetil injection. The proposed Consent Agreement will 
remedy the alleged violations by replacing the competition that would 
otherwise be eliminated by the Proposed Acquisition.

The Relevant Products and Structure of the Markets

    Mylan's proposed purchase of Agila will lessen current and future 
competition in each of the eleven generic injectable pharmaceutical 
product markets, in part, because the Proposed Acquisition will reduce 
the number of suppliers competing for customers in each market. 
Injectable drugs are administered intravenously, usually via a syringe 
or hollow needle. Generic versions of these drugs are usually launched 
after a branded product's patents expire, or a generic supplier 
successfully challenges such patents in court or reaches a legal 
settlement with the branded manufacturer. Once multiple generic 
suppliers enter a market, the branded drug manufacturer usually ceases 
to provide any competitive constraint on the prices for generic 
versions of the drug. Rather, the generic suppliers compete only 
against each other. Sometimes, however, a branded injectable drug 
manufacturer may choose to lower its price and compete against generic 
versions of the drug, in which case it would be a participant in the 
generic drug market.
    The number of suppliers in generic pharmaceutical markets is 
critical because prices generally decrease as the number of competing 
generic suppliers increases. In addition, the injectable pharmaceutical 
industry generally, and the generic products at issue in this 
investigation in particular, are highly susceptible to supply 
disruptions caused by the inherent difficulties of producing sterile 
liquid drugs. Recent manufacturing problems have made it difficult for 
customers to obtain sufficient quantities of, and contributed to price 
increases of, several of the generic injectable products impacted by 
this transaction. By reducing the number of competitors in these 
markets, the Proposed Acquisition will likely create a direct and 
substantial anticompetitive effect on prices for each of the relevant 
products, absent the remedies required by the proposed Consent 
Agreement.
    The Proposed Acquisition will reduce current (or imminent) 
competition in the markets for each of the following generic injectable 
products: (1) Amiodarone hydrochloride injection; (2) etomidate 
injection; (3) fluorouracil injection; (4) labetalol hydrochloride 
injection; (5) mesna injection; and (6) methotrexate sodium 
preservative-free injection. The structure of these markets is as 
follows:
     Amiodarone hydrochloride injection is an anti-arrhythmic 
cardiac drug of last resort used to treat patients with frequently 
recurring ventricular fibrillation or unstable ventricular tachycardia. 
The market for amiodarone hydrochloride injection is highly 
concentrated with only three current suppliers for the drug--Mylan,

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Fresenius Kabi AG (``Fresenius''), and Hikma Pharmaceuticals PLC. Mylan 
has a 60% share of the market. Agila has an approved Abbreviated New 
Drug Application (``ANDA'') from the U.S. Food and Drug Administration 
(``FDA'') and is about to enter this market, as is one other firm. 
Thus, the Proposed Acquisition would reduce the number of suppliers of 
generic amiodarone hydrochloride injection from five to four.
     Etomidate injection is an anesthetic agent used to induce 
general anesthesia and sedation for surgical procedures. There are 
currently four significant suppliers in this highly concentrated 
market--Mylan, Agila (which distributes its product through Pfizer Inc. 
and Sagent), Hospira, Inc. (``Hospira''), and American Regent, Inc. 
Absent a remedy, the Proposed Acquisition would substantially increase 
concentration in this market, provide the combined firm a market share 
of 46%, and reduce the number of suppliers of generic etomidate 
injection from four to three.
     Fluorouracil injection treats colon, rectal, breast, 
stomach, and pancreatic cancers. In this highly concentrated market, 
four firms have supplied fluorouracil injection in the recent past--
Mylan, Fresenius, Teva Pharmaceutical Industries Ltd. (``Teva''), and 
Sandoz International GmbH. (``Sandoz''). A number of these suppliers, 
however, have experienced significant manufacturing issues. Agila is 
the only other company that currently holds an approved ANDA to sell 
generic fluorouracil in the United States. The Proposed Acquisition 
would reduce the number of firms capable of supplying generic 
fluorouracil injection from five to four.
     Labetalol hydrochloride injection treats severe 
hypertension. The market for labetalol hydrochloride injection is 
highly concentrated and only five firms are capable of supplying the 
drug today--Mylan, Agila, Hospira, Akorn, Inc., and Apotex Inc. 
Currently, Hospira and Akorn make most of the sales in this market, and 
Mylan, Agila, and Apotex are the only other firms with approved ANDAs 
and manufacturing facilities currently capable of producing this 
product. The Proposed Acquisition would reduce the number of firms 
capable of supplying generic labetalol hydrochloride injection from 
five to four.
     Mesna injection is a detoxifying agent used to prevent 
damage to the urinary tract caused by ifosfamide, a third-line 
chemotherapy drug used to treat germ cell testicular cancer. There are 
four current, significant suppliers of generic mesna injection--Mylan, 
Agila, Fresenius, and Baxter International Inc. The Proposed 
Acquisition would increase concentration in this market substantially, 
and reduce the number of current suppliers of generic mesna injection 
from four to three.
     Methotrexate sodium preservative-free injection treats 
several types of pediatric cancers, as well as certain autoimmune 
disorders such as rheumatoid arthritis and multiple sclerosis. Five 
firms currently supply the market for methotrexate sodium preservative-
free injection--Mylan, Agila, Fresenius, Teva, and Hospira. The 
Proposed Acquisition would reduce the number of current suppliers of 
this drug from five to four.
    In addition, the Proposed Acquisition will significantly reduce 
future competition in the markets for the following generic injectable 
products: (1) Acetylcysteine injection; (2) fomepizole injection; (3) 
ganciclovir injection; and (4) meropenem injection. In each of these 
markets, either Mylan or Agila, or both, currently do not supply an 
existing generic product, but will likely do so in the near future, and 
entry by one or both of the parties will likely increase price 
competition in that market significantly absent the Proposed 
Acquisition. The structure of each of these markets is as follows:
     Acetylcysteine injection prevents or minimizes liver 
damage resulting from acetaminophen overdose. There are two generic 
acetylcysteine injection products currently on the market, and Mylan 
and Agila are two of only a limited number of firms that have generic 
products in development. Therefore, the Proposed Acquisition would 
significantly reduce the number of likely future suppliers of generic 
acetylcysteine injection.
     Injectable fomepizole treats accidental poisoning caused 
by ethylene glycol or methanol ingestion. Three firms currently supply 
the highly concentrated market for generic fomepizole injection--Mylan, 
X-Gen Pharmaceuticals, Inc., and Sandoz. Agila is developing its own 
generic fomepizole injection product and likely would be the next firm 
to enter the market. As a result, the Proposed Acquisition would 
significantly reduce the number of suppliers of generic fomepizole 
injection in the near future.
     Ganciclovir injection is an antiviral medication used to 
treat patients with weakened immune systems, such as patients with HIV-
AIDS and transplant recipients, to slow the growth of cytomegalovirus, 
a form of herpes virus that can lead to blindness. Currently, Roche 
Palo Alto, LLC (``Roche'') sells a branded product, Cytovene. Fresenius 
sells the only generic version of this drug. Mylan and Agila are two of 
only a limited number of firms that have this drug in development. 
Therefore, the Proposed Acquisition would result in the reduction of 
likely future suppliers of generic ganciclovir injection.
     Meropenem injection is an ultra-broad spectrum antibiotic 
used as a last resort to treat serious bacterial infections in an 
intensive care setting. There are currently four suppliers of the 
drug--AstraZeneca PLC, Fresenius, Hospira, and Sandoz. All four of 
these companies, however, obtain their supplies of meropenem from two 
manufacturers. Mylan and Agila are two of only a limited number of 
firms that have a generic meropenem injection product in development. 
They are also the only likely entrants that will source their meropenem 
products from alternative manufacturing facilities. As a result, the 
Proposed Acquisition would significantly reduce the number of 
marketers, as well as the sources of manufacturing, of generic 
meropenem injection in the future.
    Finally, the Proposed Acquisition will significantly reduce 
potential competition in one generic market that does not yet exist--
the market for mycophenolate mofetil injections. This market would be 
highly concentrated when Mylan and Agila would likely enter it in the 
future. Mycophenolate mofetil injection is an immunosuppressant used in 
transplant medicine to subdue T-cell and B-cell production, reducing 
the risk of transplant rejection. Today, Roche sells its branded 
product, CellCept. When generic entry occurs, Mylan and Agila would 
likely be among a limited number of suppliers. Thus, the Proposed 
Acquisition would significantly reduce the number of likely future 
suppliers of this drug to the detriment of consumers.

Entry

    Entry into each of these generic injectable product markets will 
not be timely, likely, or sufficient in magnitude, character, and scope 
to deter or counteract the likely anticompetitive effects of the 
Proposed Acquisition. The combination of drug development times and 
regulatory requirements, including FDA approval, takes well in excess 
of two years.

Competitive Effects

    Absent a remedy, the Proposed Acquisition would likely cause 
significant anticompetitive harm to consumers in the relevant generic 
injectable pharmaceutical markets,

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either by eliminating significant current or potential competition in 
concentrated existing markets, or by eliminating significant potential 
competition among a limited number of likely competitors in a future 
market. In each of these markets, Mylan and Agila are two of only a 
limited number of current or likely future suppliers of the drugs in 
the United States. The evidence shows that prices may continue to 
decrease even after a number of suppliers have entered a generic 
injectable drug market. Thus, although Mylan or Agila have not entered 
some of the markets at issue yet, both companies likely will compete in 
those markets in the future, and that competition is expected to reduce 
prices for consumers. The evidence also shows that the removal of an 
independent generic injectable drug supplier from the relevant markets 
in which Mylan and Agila currently compete would result in 
significantly higher prices post-acquisition. Therefore, by eliminating 
the significant current and future competition between the parties, the 
Proposed Acquisition will likely cause U.S. consumers to pay 
significantly higher prices for these generic injectable drugs, absent 
a remedy.

The Consent Agreement

    The Consent Agreement effectively remedies the Proposed 
Acquisition's anticompetitive effects in each relevant market. Under 
the Consent Agreement, the parties are required to divest either 
Mylan's or Agila's rights and assets related to (1) Amiodarone 
hydrochloride injection, (2) etomidate injection, (3) fluorouracil 
injection, (4) mesna injection, (5) methotrexate sodium preservative-
free injection, (6) acetylcysteine injection, (7) fomepizole injection, 
(8) ganciclovir injection, (9) meropenem injection, and (10) 
mycophenolate mofetil injection. In addition, Mylan is required to 
release all of its rights and assets related to labetalol hydrochloride 
injection. The parties must accomplish these divestitures and 
relinquish their rights no later than ten days after the acquisition.
    The proposed Consent Agreement requires Mylan to terminate its 
contract with Gland and to release all rights related to labetalol 
hydrochloride injection. Gland, a global pharmaceutical company based 
in India, is Mylan's contract manufacturer for this drug. Given its 
experience with this drug, Gland is well positioned to replicate the 
competition that would otherwise have been lost as a result of the 
Proposed Acquisition. The proposed Consent Agreement also requires 
Mylan to divest assets related to fluorouracil injection and 
methotrexate sodium preservative-free injection to Intas and to divest 
assets related to etomidate injection, ganciclovir injection, meropenem 
injection, and mycophenolate mofetil injection to JHP. In addition, the 
proposed Consent Agreement requires Agila and Strides to divest assets 
related to acetylcysteine injection and mesna injection to Sagent and 
to divest assets related to amiodarone hydrochloride injection and 
fomepizole injection to JHP. Intas is a global pharmaceutical company 
based in India with approximately 79 prescription drugs approved for 
sale in the United States, as well as an active product development 
pipeline. JHP is a New Jersey based pharmaceutical company with 
approximately 22 approved ANDAs and an active product development 
pipeline. Finally, Sagent, a pharmaceutical company based in Illinois, 
has approximately 58 approved ANDAs and an active product development 
pipeline. With their experience in generic markets, Intas, JHP, and 
Sagent are expected to replicate fully the competition that would 
otherwise have been lost as a result of the Proposed Acquisition.
    The Commission's goal in evaluating possible acquirers of divested 
assets is to maintain the competitive environment that existed prior to 
the acquisition. If the Commission determines that Intas, JHP, Sagent, 
or Gland are not acceptable acquirers, or that the manner of the 
divestitures or releases is not acceptable, the parties must unwind the 
sale or release of rights to Intas, JHP, Sagent, or Gland and divest 
the products to a Commission-approved acquirer within six months of the 
date the Order becomes final. In that circumstance, the Commission may 
appoint a trustee to divest the products if the parties fail to divest 
the products as required.
    The proposed Consent Agreement contains several provisions to help 
ensure that the divestitures are successful. The Order requires Mylan, 
Agila, and Strides to take all action to maintain the economic 
viability, marketability, and competitiveness of the products to be 
divested until such time that they are transferred to a Commission-
approved acquirer. Mylan and Agila must transfer their respective 
manufacturing technologies for generic amiodarone hydrochloride 
injection, etomidate injection, and fomepizole injection to JHP and 
must supply JHP with these drugs during the transition period. Further, 
Agila and Strides must transfer the manufacturing technology for 
acetylcysteine injection and mesna injection to Sagent and must supply 
Sagent with the two drugs during the transition period.
    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. 2013-24144 Filed 10-2-13; 8:45 am]
BILLING CODE 6750-01-P