Pfizer Inc. and Hospira, Inc.; Analysis of Proposed Consent Orders To Aid Public Comment, 52475-52478 [2015-21513]

Download as PDF tkelley on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 168 / Monday, August 31, 2015 / Notices there are impacts under the Privacy Act. The FCC’s system of records notice (SORN), FCC/WCB–1, ‘‘Lifeline Program.’’ The Commission will use the information contained in FCC/WCB–1 to cover the personally identifiable information (PII) that is required as part of the Lifeline Program (‘‘Lifeline’’). As required by the Privacy Act of 1974, as amended, 5 U.S.C. 552a, the Commission also published a SORN, FCC/WCB–1 ‘‘Lifeline Program’’ in the Federal Register on December 6, 2013 (78 FR 73535). Also, respondents may request materials or information submitted to the Commission or to the Universal Service Administrative Company (USAC or Administrator) be withheld from public inspection under 47 CFR 0.459 of the FCC’s rules. We note that USAC must preserve the confidentiality of all data obtained from respondents; must not use the data except for purposes of administering the universal service programs; and must not disclose data in company-specific form unless directed to do so by the Commission. Needs and Uses: The Commission will submit this information collection after this comment period to obtain the full, three year clearance from the Office of Management and Budget (OMB). The Commission also proposes several revisions to this information collection. In June 2015, the Commission adopted an order reforming its low-income universal service support mechanisms. Lifeline and Link Up Reform and Modernization; Telecommunications Carriers Eligible for Universal Service Support; Connect America Fund, WC Docket Nos. 11–42, 09–197, 10–90, Second Further Notice of Proposed Rulemaking, Order on Reconsideration, Second Report and Order, and Memorandum Opinion and Order, (Lifeline Second Reform Order). This revised information collection addresses requirements to carry out the programs to which the Commission committed itself in the Lifeline Second Reform Order. Under this information collection, the Commission seeks to revise the information collection to comply with the Commission’s new rules, adopted in the 2015 Lifeline Second Reform Order, regarding the retention of subscriber eligibility documentation, eligible telecommunications carrier (ETC) designation, and ETC reimbursement under the Lifeline program; update the number of respondents for all the existing information collection requirements, thus increasing the total burden hours for some requirements and decreasing the total burden hours for other requirements; eliminate some VerDate Sep<11>2014 16:19 Aug 28, 2015 Jkt 235001 requirements as part of this information collection, because they are no longer applicable; revise the FCC Form 555 and the accompanying instructions to require ETCs to provide a Service Provider Identification Number (SPIN); and make non-substantive changes to this information collection, pursuant to 44 U.S.C. 3507, to update the FCC Form 497 Instructions and require the electronic filing of the FCC Forms 497 and 555. These updates do not modify the burdens or costs contained in this information collection. 52475 Market Street, San Francisco, California 94105–1579: 1. KEDAP S.A. de C.V., Mexico City, Mexico; to become a bank holding company by acquiring at least 34 percent of the voting shares of Commerce Bank of Temecula Valley, Murrieta, California. Board of Governors of the Federal Reserve System, August 26, 2015. Michael J. Lewandowski, Associate Secretary of the Board. [FR Doc. 2015–21461 Filed 8–28–15; 8:45 am] BILLING CODE 6210–01–P Federal Communications Commission. Gloria J. Miles, Federal Register Liaison Officer. FEDERAL TRADE COMMISSION [FR Doc. 2015–21407 Filed 8–28–15; 8:45 am] [File No. 151 0074] BILLING CODE 6712–01–P Pfizer Inc. and Hospira, Inc.; Analysis of Proposed Consent Orders To Aid Public Comment FEDERAL RESERVE SYSTEM Formations of, Acquisitions by, and Mergers of Bank Holding Companies The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR part 225), and all other applicable statutes and regulations to become a bank holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the bank holding company, including the companies listed below. The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than September 25, 2015. A. Federal Reserve Bank of San Francisco (Gerald C. Tsai, Director, Applications and Enforcement) 101 PO 00000 Frm 00036 Fmt 4703 Sfmt 4703 Federal Trade Commission. Proposed Consent Agreement. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting 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 orders— embodied in the consent agreement— that would settle these allegations. DATES: Comments must be received on or before September 23, 2015. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ pfizerhospiraconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ‘‘Pfizer Hospira Consent, File No. 151 0074’’ on your comment and file your comment online at https:// ftcpublic.commentworks.com/ftc/ pfizerhospiraconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘Pfizer Hospira Consent, File No. 151 0074’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Kari A. Wallace, Bureau of Competition, (202–326–3085), 600 Pennsylvania Avenue NW., Washington, DC 20580. SUMMARY: E:\FR\FM\31AUN1.SGM 31AUN1 52476 Federal Register / Vol. 80, No. 168 / Monday, August 31, 2015 / Notices 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 consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, have 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 August 24, 2015), on the World Wide Web, at http://www.ftc.gov/ os/actions.shtm. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before September 23, 2015. Write ‘‘Pfizer Hospira Consent, File No. 151 0074’’ 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 http:// 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 tkelley on DSK3SPTVN1PROD with NOTICES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 16:19 Aug 28, 2015 Jkt 235001 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. 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/ pfizerhospiraconsent by following the instructions on the web-based form. If this Notice appears at http:// www.regulations.gov/#!home, you also may file a comment through that Web site. If you file your comment on paper, write ‘‘Pfizer Hospira Consent, File No. 151 0074’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service. Visit the Commission Web site at http://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 September 23, 2015. For information on the Commission’s privacy policy, including routine uses permitted by the Privacy Act, see http:// www.ftc.gov/ftc/privacy.htm. Analysis of Agreement Containing Consent Orders To Aid Public Comment The Federal Trade Commission (‘‘Commission’’) has accepted, subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’) from Pfizer Inc. (‘‘Pfizer’’) and Hospira, Inc. (‘‘Hospira’’) that is designed to remedy the anticompetitive effects resulting from Pfizer’s 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). PO 00000 Frm 00037 Fmt 4703 Sfmt 4703 acquisition of Hospira. Under the terms of the proposed Consent Agreement, the parties are required to divest all of Pfizer’s rights and assets related to generic acetylcysteine inhalation solution and all Hospira’s rights and assets related to clindamycin phosphate injection, voriconazole injection, and melphalan hydrochloride injection to Alvogen Group, Inc. (‘‘Alvogen’’). 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, to make a final decision as to whether it should withdraw from the proposed Consent Agreement or make final the Decision and Order (‘‘Order’’). Pursuant to an Agreement and Plan of Merger executed on February 5, 2015, Pfizer proposes to acquire Hospira for approximately $16 billion (the ‘‘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 competition in the markets for generic acetylcysteine inhalation solution and clindamycin phosphate injection and future competition in the markets for voriconazole injection and melphalan hydrochloride injection in the United States. The proposed Consent Agreement will remedy the alleged violations by preserving the competition that otherwise would be eliminated by the Proposed Acquisition. I. The Products and Structure of the Markets The Proposed Acquisition would reduce the number of current suppliers in the markets for generic acetylcysteine inhalation solution and clindamycin phosphate injection, and reduce the number of future suppliers in the markets for voriconazole injection and melphalan hydrochloride injection. Generic acetylcysteine inhalation solution is a mucolytic therapy used to treat certain respiratory disorders. Acetylcysteine liquefies mucus in the lungs, which then can be coughed or suctioned out. Patients inhale the solution through a nebulizer mask, facemask, mouthpiece, tent, or intermittent positive pressure-breathing machine. Only three companies— Fresenius Kabi, partnered with Gland Pharma Ltd. and Pfizer; Hospira; and E:\FR\FM\31AUN1.SGM 31AUN1 Federal Register / Vol. 80, No. 168 / Monday, August 31, 2015 / Notices American Regent, Inc.—supply generic acetylcysteine inhalation solution in the United States. The branded version of this product, Mucomyst, is no longer available. Fresenius/Gland/Pfizer is the market leader with an approximately 69% share and Hospira has an approximately 22% share. Clindamycin phosphate injection is an antibiotic used to treat lung, skin, blood, bone, joint, and gynecological infections in hospitals. Currently, only four companies supply the product in the United States: Pfizer, Hospira, Sagent Pharmaceuticals, and Fresenius Kabi. While Pfizer’s clindamycin phosphate product is a branded version, the price of Pfizer’s product is competitive with the generic products. Customers, therefore, play the branded and the generic products against each other to negotiate prices. Pfizer and Hospira have a combined approximate market share of more than 80%. Voriconazole injection is an antifungal medication used to treat significant fungal infections in hospitals. Pfizer currently sells its Vfend brand voriconazole injection product priced competitively with the only generic version in the United States, which is offered by Sandoz. Hospira is one of a limited number of suppliers capable of entering the voriconazole injection market in the near future. Melphalan hydrochloride injection is a chemotherapy agent used to treat multiple myeloma and ovarian cancer. There are currently two melphalan hydrochloride injection products available in the United States: The branded version, which was originally developed and marketed by Glaxo Smith Kline and is now supplied by ApoPharma USA, Inc. (‘‘ApoPharma’’), and the generic version, sold by Mylan N.V. (‘‘Mylan’’). ApoPharma prices its branded version of the product competitively with the generic version offered by Mylan. Pfizer and Hospira are developing melphalan hydrochloride injection products, and are two of a limited number of suppliers capable of entering the market in the near future. tkelley on DSK3SPTVN1PROD with NOTICES II. Entry Entry into the four markets described earlier would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the Proposed Acquisition. The combination of drug development times and regulatory requirements, including approval by the United States Food and Drug Administration (‘‘FDA’’), is costly and lengthy. VerDate Sep<11>2014 16:19 Aug 28, 2015 Jkt 235001 III. Effects In markets for pharmaceutical products used primarily in hospitals, like the products here, branded drug manufacturers are typically unable to command a premium price for their products because of the reimbursement structure for drugs administered in hospitals. Hospitals typically would not be reimbursed for using a premiumpriced branded injectable product, when lower-priced therapeutically equivalent products are available. As a result, brand manufacturers of sterile injectable or inhalation products may lower their prices and compete directly with generic manufacturers’ products. Customers tend to gravitate to the lowest-priced product, regardless of whether the drug was approved by the FDA as a brand or a generic product. Like true generic pharmaceutical markets, these multi-source pharmaceutical products generally are commodities, and prices often are inversely correlated with the number of competitors in each market. As the number of suppliers offering a therapeutically equivalent drug increases, the price for that drug decreases due to the direct competition between the existing suppliers and each additional supplier. The Proposed Acquisition would eliminate the current competition between two of the three competitors in the market for generic acetylcysteine inhalation solution, resulting in a duopoly and likely price increases. Similarly, in the market for clindamycin phosphate solution, the Proposed Acquisition would eliminate competition between two of only four current competitors, leading to higher prices. In addition, the Proposed Acquisition likely would cause significant anticompetitive harm to consumers by eliminating future competition that would otherwise have occurred if Pfizer and Hospira remained independent. The evidence shows that anticompetitive effects are likely to result from the Proposed Acquisition due to the elimination of an additional independent entrant in the currently concentrated markets for voriconazole injection and melphalan hydrochloride injection, which would have enabled customers to negotiate lower prices. Customers and competitors have observed—and pricing data confirms— that the price of these pharmaceutical products decreases with new entry even after several other suppliers have entered the market. Thus, absent a remedy, the Proposed Acquisition will likely cause U.S. consumers to pay significantly higher prices for PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 52477 voriconazole injection and melphalan hydrochloride injection. IV. The Consent Agreement The proposed Consent Agreement effectively remedies the competitive concerns raised by the acquisition in all four markets at issue by requiring Pfizer to divest all its rights to generic acetylcysteine inhalation solution and Hospira to divest all of its rights and assets related to clindamycin phosphate injection, voriconazole injection, and melphalan hydrochloride injection to Alvogen. Alvogen is a private, global pharmaceutical corporation that develops, manufacturers, sells, and distributes generic pharmaceuticals in the United States and in 33 other countries around the world. The parties must accomplish these divestitures and relinquish their rights no later than ten days after the Proposed Acquisition is consummated. The Commission’s goal in evaluating possible purchasers of divested assets is to maintain the competitive environment that existed prior to the Proposed Acquisition. If the Commission determines that Alvogen is not an acceptable acquirer, or that the manner of the divestitures is not acceptable, the proposed Order requires the parties to unwind the sale of rights to Alvogen and then divest the products to a Commission-approved acquirer within six months of the date the Order becomes final. The proposed Order further allows the Commission to appoint a trustee in the event the parties fail to divest the products as required. The proposed Consent Agreement and Order contain several provisions to help ensure that the divestitures are successful. Alvogen will acquire Pfizer’s acetylcysteine inhalation ANDA and stream of revenue associated with the product and will assume Pfizer’s role in the contractual relationships with the third parties. Pfizer/Hospira will supply Alvogen with the clindamycin phosphate injection products for three years while the company transfers the manufacturing technology to Alvogen or its designee. Similarly, Pfizer/Hospira will transfer the third-party development and contract manufacturing agreements for voriconazole injection and melphalan hydrochloride injection to Alvogen. The proposed Order also requires Pfizer and Hospira to provide transitional services to Alvogen to assist it in establishing its manufacturing capabilities and securing all of the necessary FDA approvals. These transitional services include technical assistance to manufacture clindamycin in substantially the same manner and quality employed or E:\FR\FM\31AUN1.SGM 31AUN1 52478 Federal Register / Vol. 80, No. 168 / Monday, August 31, 2015 / Notices achieved by Hospira, and advice and training from knowledgeable employees of the parties. 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. [Docket No.: 108002015–1111–07] Notice of Standard Terms and Conditions for Council Grants Gulf Coast Ecosystem Restoration Council. AGENCY: Notice. The Gulf Coast Ecosystem Restoration Council (Council) has established Financial Assistance Standard Terms and Conditions (STCs) that will apply to all grants awarded by the Council. SUMMARY: The STCs are effective on August 31, 2015. DATES: FOR FURTHER INFORMATION CONTACT: Kristin Smith, Council staff, telephone number: 504–444–3558. The Council is authorized to award grants pursuant to the Council-Selected Restoration and Spill Impact Components of the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act), 33 U.S.C. 1321(t)(2) and 1321(t)(3). The Council has established STCs that will apply to and be incorporated into all grants awarded by the Council under the RESTORE Act. The electronic version of the STCs can be viewed and downloaded at www.restorethegulf.gov/resources/foialibrary-council-documents. SUPPLEMENTARY INFORMATION: tkelley on DSK3SPTVN1PROD with NOTICES Emergency Clearance: Public Information Collection Requirements Submitted to the Office of Management and Budget (OMB) The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS’ intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information. Interested persons are invited to send comments regarding our burden estimates 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. We are, however, requesting an emergency review of the information collection referenced below. In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have submitted to the Office of Management and Budget (OMB) the following requirements for emergency review. This is necessary to ensure compliance with an initiative of the Administration. We are requesting an emergency review under 5 CFR 1320.13(a)(2)(i) because public harm is reasonably likely to result if the normal clearance procedures are followed. We are seeking emergency approval for modifications to the information collection request (ICR) currently approved under Office of Management and Budget (OMB) control number 0938–1155. CMS seeks an emergency revision to the ICR approved under 0938–1155 to collect additional information from health insurance companies as part of the MLR and risk corridors programs. This ICR is necessary to validate data that issuers have previously submitted to CMS in SUMMARY: GULF COAST ECOSYSTEM RESTORATION COUNCIL Will D. Spoon, Program Analyst, Gulf Coast Ecosystem Restoration Council. [FR Doc. 2015–21417 Filed 8–28–15; 8:45 am] BILLING CODE P 16:19 Aug 28, 2015 [Document Identifiers: CMS–10401] Centers for Medicare & Medicaid Services. ACTION: Notice. BILLING CODE 6750–01–P VerDate Sep<11>2014 Centers for Medicare & Medicaid Services AGENCY: [FR Doc. 2015–21513 Filed 8–28–15; 8:45 am] ACTION: DEPARTMENT OF HEALTH AND HUMAN SERVICES Jkt 235001 PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 more detail than CMS has previously anticipated. While conducting program integrity reviews of submitted data, CMS has identified a number of significant discrepancies in the 2014 benefit year submissions that issuers made for MLR and risk corridors on July 31, 2015. CMS also identified a number of common errors that may lead to submissions that do not comply with CMS regulations and guidance. In order to resolve these potential discrepancies, ensure all submissions comply with applicable guidance, and operate the MLR and risk corridors program accurately and effectively, CMS needs additional information to explain the data found in issuers’ underlying MLR and risk corridors submissions. Without this additional information, CMS will be unable to verify the accuracy of the submission and validate the data needed to operate the MLR or risk corridors programs. DATES: Comments must be received by September 3, 2015. ADDRESSES: When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways: 1. Electronically. You may send your comments electronically to http:// www.regulations.gov. Follow the instructions for ‘‘Comment or Submission’’ or ‘‘More Search Options’’ to find the information collection document(s) that are accepting comments. 2. By regular mail. You may mail written comments to the following address: CMS, Office of Strategic Operations and Regulatory Affairs, Division of Regulations Development, Attention: CMS–10401/OMB Control Number 0938–1155, Room C4–26–05, 7500 Security Boulevard, Baltimore, Maryland 21244–1850. To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following: 1. Access CMS’ Web site address at http://www.cms.hhs.gov/ PaperworkReductionActof1995. 2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to Paperwork@cms.hhs.gov. 3. Call the Reports Clearance Office at (410) 786–1326. FOR FURTHER INFORMATION CONTACT: Reports Clearance Office at (410) 786– 1326. SUPPLEMENTARY INFORMATION: E:\FR\FM\31AUN1.SGM 31AUN1

Agencies

[Federal Register Volume 80, Number 168 (Monday, August 31, 2015)]
[Notices]
[Pages 52475-52478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21513]


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FEDERAL TRADE COMMISSION

[File No. 151 0074]


Pfizer Inc. and Hospira, Inc.; Analysis of Proposed 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 methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the draft complaint and the terms of the consent 
orders-- embodied in the consent agreement--that would settle these 
allegations.

DATES: Comments must be received on or before September 23, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/pfizerhospiraconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Pfizer Hospira 
Consent, File No. 151 0074'' on your comment and file your comment 
online at https://ftcpublic.commentworks.com/ftc/pfizerhospiraconsent 
by following the instructions on the web-based form. If you prefer to 
file your comment on paper, write ``Pfizer Hospira Consent, File No. 
151 0074'' on your comment and on the envelope, and mail your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Kari A. Wallace, Bureau of 
Competition, (202-326-3085), 600 Pennsylvania Avenue NW., Washington, 
DC 20580.

[[Page 52476]]


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 consent orders to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, have 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 August 24, 2015), on the World Wide Web, at 
http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before September 23, 
2015. Write ``Pfizer Hospira Consent, File No. 151 0074'' 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 http://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 
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).
---------------------------------------------------------------------------

    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/pfizerhospiraconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Pfizer Hospira Consent, 
File No. 151 0074'' on your comment and on the envelope, and mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Visit the Commission Web site at http://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 September 23, 2015. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Pfizer Inc. (``Pfizer'') and Hospira, Inc. 
(``Hospira'') that is designed to remedy the anticompetitive effects 
resulting from Pfizer's acquisition of Hospira. Under the terms of the 
proposed Consent Agreement, the parties are required to divest all of 
Pfizer's rights and assets related to generic acetylcysteine inhalation 
solution and all Hospira's rights and assets related to clindamycin 
phosphate injection, voriconazole injection, and melphalan 
hydrochloride injection to Alvogen Group, Inc. (``Alvogen'').
    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, to make a 
final decision as to whether it should withdraw from the proposed 
Consent Agreement or make final the Decision and Order (``Order'').
    Pursuant to an Agreement and Plan of Merger executed on February 5, 
2015, Pfizer proposes to acquire Hospira for approximately $16 billion 
(the ``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 competition in the markets for generic acetylcysteine 
inhalation solution and clindamycin phosphate injection and future 
competition in the markets for voriconazole injection and melphalan 
hydrochloride injection in the United States. The proposed Consent 
Agreement will remedy the alleged violations by preserving the 
competition that otherwise would be eliminated by the Proposed 
Acquisition.

I. The Products and Structure of the Markets

    The Proposed Acquisition would reduce the number of current 
suppliers in the markets for generic acetylcysteine inhalation solution 
and clindamycin phosphate injection, and reduce the number of future 
suppliers in the markets for voriconazole injection and melphalan 
hydrochloride injection.
    Generic acetylcysteine inhalation solution is a mucolytic therapy 
used to treat certain respiratory disorders. Acetylcysteine liquefies 
mucus in the lungs, which then can be coughed or suctioned out. 
Patients inhale the solution through a nebulizer mask, facemask, 
mouthpiece, tent, or intermittent positive pressure-breathing machine. 
Only three companies--Fresenius Kabi, partnered with Gland Pharma Ltd. 
and Pfizer; Hospira; and

[[Page 52477]]

American Regent, Inc.--supply generic acetylcysteine inhalation 
solution in the United States. The branded version of this product, 
Mucomyst, is no longer available. Fresenius/Gland/Pfizer is the market 
leader with an approximately 69% share and Hospira has an approximately 
22% share.
    Clindamycin phosphate injection is an antibiotic used to treat 
lung, skin, blood, bone, joint, and gynecological infections in 
hospitals. Currently, only four companies supply the product in the 
United States: Pfizer, Hospira, Sagent Pharmaceuticals, and Fresenius 
Kabi. While Pfizer's clindamycin phosphate product is a branded 
version, the price of Pfizer's product is competitive with the generic 
products. Customers, therefore, play the branded and the generic 
products against each other to negotiate prices. Pfizer and Hospira 
have a combined approximate market share of more than 80%.
    Voriconazole injection is an antifungal medication used to treat 
significant fungal infections in hospitals. Pfizer currently sells its 
Vfend brand voriconazole injection product priced competitively with 
the only generic version in the United States, which is offered by 
Sandoz. Hospira is one of a limited number of suppliers capable of 
entering the voriconazole injection market in the near future.
    Melphalan hydrochloride injection is a chemotherapy agent used to 
treat multiple myeloma and ovarian cancer. There are currently two 
melphalan hydrochloride injection products available in the United 
States: The branded version, which was originally developed and 
marketed by Glaxo Smith Kline and is now supplied by ApoPharma USA, 
Inc. (``ApoPharma''), and the generic version, sold by Mylan N.V. 
(``Mylan''). ApoPharma prices its branded version of the product 
competitively with the generic version offered by Mylan. Pfizer and 
Hospira are developing melphalan hydrochloride injection products, and 
are two of a limited number of suppliers capable of entering the market 
in the near future.

II. Entry

    Entry into the four markets described earlier would not be timely, 
likely, or sufficient in magnitude, character, and scope to deter or 
counteract the anticompetitive effects of the Proposed Acquisition. The 
combination of drug development times and regulatory requirements, 
including approval by the United States Food and Drug Administration 
(``FDA''), is costly and lengthy.

III. Effects

    In markets for pharmaceutical products used primarily in hospitals, 
like the products here, branded drug manufacturers are typically unable 
to command a premium price for their products because of the 
reimbursement structure for drugs administered in hospitals. Hospitals 
typically would not be reimbursed for using a premium-priced branded 
injectable product, when lower-priced therapeutically equivalent 
products are available. As a result, brand manufacturers of sterile 
injectable or inhalation products may lower their prices and compete 
directly with generic manufacturers' products. Customers tend to 
gravitate to the lowest-priced product, regardless of whether the drug 
was approved by the FDA as a brand or a generic product.
    Like true generic pharmaceutical markets, these multi-source 
pharmaceutical products generally are commodities, and prices often are 
inversely correlated with the number of competitors in each market. As 
the number of suppliers offering a therapeutically equivalent drug 
increases, the price for that drug decreases due to the direct 
competition between the existing suppliers and each additional 
supplier. The Proposed Acquisition would eliminate the current 
competition between two of the three competitors in the market for 
generic acetylcysteine inhalation solution, resulting in a duopoly and 
likely price increases. Similarly, in the market for clindamycin 
phosphate solution, the Proposed Acquisition would eliminate 
competition between two of only four current competitors, leading to 
higher prices.
    In addition, the Proposed Acquisition likely would cause 
significant anticompetitive harm to consumers by eliminating future 
competition that would otherwise have occurred if Pfizer and Hospira 
remained independent. The evidence shows that anticompetitive effects 
are likely to result from the Proposed Acquisition due to the 
elimination of an additional independent entrant in the currently 
concentrated markets for voriconazole injection and melphalan 
hydrochloride injection, which would have enabled customers to 
negotiate lower prices. Customers and competitors have observed--and 
pricing data confirms--that the price of these pharmaceutical products 
decreases with new entry even after several other suppliers have 
entered the market. Thus, absent a remedy, the Proposed Acquisition 
will likely cause U.S. consumers to pay significantly higher prices for 
voriconazole injection and melphalan hydrochloride injection.

IV. The Consent Agreement

    The proposed Consent Agreement effectively remedies the competitive 
concerns raised by the acquisition in all four markets at issue by 
requiring Pfizer to divest all its rights to generic acetylcysteine 
inhalation solution and Hospira to divest all of its rights and assets 
related to clindamycin phosphate injection, voriconazole injection, and 
melphalan hydrochloride injection to Alvogen. Alvogen is a private, 
global pharmaceutical corporation that develops, manufacturers, sells, 
and distributes generic pharmaceuticals in the United States and in 33 
other countries around the world. The parties must accomplish these 
divestitures and relinquish their rights no later than ten days after 
the Proposed Acquisition is consummated.
    The Commission's goal in evaluating possible purchasers of divested 
assets is to maintain the competitive environment that existed prior to 
the Proposed Acquisition. If the Commission determines that Alvogen is 
not an acceptable acquirer, or that the manner of the divestitures is 
not acceptable, the proposed Order requires the parties to unwind the 
sale of rights to Alvogen and then divest the products to a Commission-
approved acquirer within six months of the date the Order becomes 
final. The proposed Order further allows the Commission to appoint a 
trustee in the event the parties fail to divest the products as 
required.
    The proposed Consent Agreement and Order contain several provisions 
to help ensure that the divestitures are successful. Alvogen will 
acquire Pfizer's acetylcysteine inhalation ANDA and stream of revenue 
associated with the product and will assume Pfizer's role in the 
contractual relationships with the third parties. Pfizer/Hospira will 
supply Alvogen with the clindamycin phosphate injection products for 
three years while the company transfers the manufacturing technology to 
Alvogen or its designee. Similarly, Pfizer/Hospira will transfer the 
third-party development and contract manufacturing agreements for 
voriconazole injection and melphalan hydrochloride injection to 
Alvogen. The proposed Order also requires Pfizer and Hospira to provide 
transitional services to Alvogen to assist it in establishing its 
manufacturing capabilities and securing all of the necessary FDA 
approvals. These transitional services include technical assistance to 
manufacture clindamycin in substantially the same manner and quality 
employed or

[[Page 52478]]

achieved by Hospira, and advice and training from knowledgeable 
employees of the parties.
    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. 2015-21513 Filed 8-28-15; 8:45 am]
BILLING CODE 6750-01-P