Teva Pharmaceutical Industries Ltd. and Allergan plc; Analysis To Aid Public Comment, 51892-51899 [2016-18562]

Download as PDF 51892 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices EXHIBIT A Area number City State 1 .............. 2 .............. 3 .............. 4 .............. 5 .............. 6 .............. 7 .............. 8 .............. 9 .............. 10 ............ 11 ............ 12 ............ 13 ............ 14 ............ 15 ............ 16 ............ 17 ............ 18 ............ 19 ............ 20 ............ 21 ............ 22 ............ 23 ............ 24 ............ 25 ............ 26 ............ 27 ............ 28 ............ 29 ............ 30 ............ 31 ............ DE ..... DE ..... DE ..... MA .... MA .... MA .... MA .... MA .... MA .... MA .... MA .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... MD .... NY ..... NY ..... 4 3 4 4 5 4 5 4 7 4 5 2 4 4 5 3 4 3 5 4 4 3 2 4 3 4 3 5 3 5 3 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2,947 3,794 4,065 2,517 3,140 2,834 2,298 4,052 2,025 3,854 2,140 5,430 3,288 3,043 3,093 4,032 2,803 3,920 4,203 3,910 4,043 3,935 5,108 3,325 3,734 3,423 3,976 3,012 3,645 2,940 3,690 5,369 6,440 5,762 3,723 4,459 4,307 2,780 5,840 2,268 5,092 2,819 10,000 3,750 4,121 3,679 5,157 3,578 5,261 5,193 4,525 4,323 5,007 10,000 4,017 5,242 4,169 5,029 3,732 5,328 4,352 6,601 2,421 2,646 1,697 1,207 1,318 1,472 482 1,789 243 1,239 679 4,570 462 1078 586 1,125 775 1,341 989 615 281 1,072 4,892 692 1,508 746 1,053 720 1,683 1,412 2,911 D2565 & D488 D960 D1321 A434 D8008 D8382 D8021 D8020 D8022 D8018 D8286 D1356 D1387 D784, D1210 & D2515 D2598 & D1529 D1549 & D1187 D1289 D1315 D1345 & D1477 D626, D1683 & D1180 D1147 D1168 D1443 & D2606 D2535 D1526 D786 A351 D1324 D1535 D8325 A515 NY ..... 4 to 3 ....... 3,269 5,786 2,517 D8368 ............ ............ ............ ............ ............ ............ ............ Lewes & Rehoboth Beach .... Millsboro ............................... Millville .................................. Gardner ................................. Kingston ................................ Mansfield & South Easton .... Milford ................................... Norwell .................................. Norwood & Walpole .............. Quincy ................................... Saugus .................................. Accokeek .............................. Bowie .................................... California ............................... Columbia ............................... Cumberland & Frostburg ...... Easton ................................... Edgewater ............................. Gaithersburg ......................... Hagerstown (South) .............. Hagerstown (North) .............. La Plata ................................ Lusby .................................... Owings Mills ......................... Prince Frederick ................... Reisterstown ......................... Salisbury ............................... Sykesville .............................. Upper Marlboro ..................... Mahopac & Carmel ............... New Paltz, Modena & Highland. Poughkeepsie & Lagrangeville. Rhinebeck & Red Hook ........ Wappingers Falls .................. Chambersburg ...................... Waynesboro .......................... York ...................................... Culpepper ............................. Fredericksburg ...................... NY NY PA PA PA VA VA 2 3 5 3 4 4 5 ....... ....... ....... ....... ....... ....... ....... 5,023 2,646 3,277 5,030 3,710 3,329 2,696 10,000 4,256 4,232 5,537 4,135 4,371 3,560 4,977 1,610 955 506 424 1,042 864 40 ............ 41 ............ 42 ............ Front Royal ........................... Purcellville ............................. Richmond .............................. VA ..... VA ..... VA ..... 3 to 2 ....... 3 to 2 ....... 5 to 4 ....... 3,638 3,679 2,198 5,095 5,321 2,857 1,456 1,642 659 43 ............ 44 ............ 45 ............ Stafford ................................. Stephens City ....................... Winchester ............................ VA ..... VA ..... VA ..... 4 to 3 ....... 3 to 2 ....... 3 to 2 ....... 3,333 4,045 3,662 4,038 5,018 5,094 705 973 1,433 46 ............ Martinsburg ........................... WV .... 4 to 3 ....... 2,759 3,568 809 A536 A598 D1527 & D994 D1663 D1241 D250 & D1567 D358, D419, D450, D1043, D1177, D1235, D1243, D1579 & D2583 D1059 D745 A6421, A6434, A6433, A6498, A6429, A6439, A6435, A6499, A6438 & A6494 D578 & D1166 D1489 D366, D362, D733, D1281, D2668 & D1164 D1189 & D2568 32 ............ 33 34 35 36 37 38 39 By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2016–18564 Filed 8–4–16; 8:45 am] mstockstill on DSK3G9T082PROD with NOTICES BILLING CODE 6750–01–P ..... ..... ..... ..... ..... ..... ..... Merger result to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to 3 2 3 3 4 3 4 3 6 3 4 1 3 3 4 2 3 2 4 3 3 2 1 3 2 3 2 4 2 4 2 to to to to to to to 1 2 4 2 3 3 4 HHI (pre) HHI (post) Delta FEDERAL TRADE COMMISSION [File No. 151 0196] Teva Pharmaceutical Industries Ltd. and Allergan plc; Analysis To Aid Public Comment 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 SUMMARY: VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 Divested store(s) Aid Public Comment describes both the allegations in the 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 August 29, 2016. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ tevaallerganconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section E:\FR\FM\05AUN1.SGM 05AUN1 mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices below. Write ‘‘In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151–0196, C– 4589—Consent Agreement’’ on your comment and file your comment online at https://ftcpublic.commentworks.com/ ftc/tevaallerganconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151–0196, C– 4589—Consent Agreement’’ 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: Michael Moiseyev (202–326–3106), 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 consent orders 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 July 27, 2016), 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 August 29, 2016. Write ‘‘In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151–0196, C–4589—Consent Agreement’’ 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. VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 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. 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/ tevaallerganconsent 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 ‘‘In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151–0196, C– 4589—Consent Agreement’’ 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 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 00054 Fmt 4703 Sfmt 4703 51893 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. 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 August 29, 2016. You can find more information, including routine uses permitted by the Privacy Act, in the Commission’s privacy policy, at 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 Teva Pharmaceutical Industries Ltd. (‘‘Teva’’) and Allergan plc (‘‘Allergan’’), which is designed to remedy the anticompetitive effects resulting from Teva’s proposed acquisition of Allergan’s generic pharmaceutical business. The proposed Consent Agreement requires the parties (1) to divest rights and assets related to pharmaceutical markets for one or more strengths of seventy-nine pharmaceutical products and (2) provide certain Teva active pharmaceutical ingredient (‘‘API’’) customers that market one or more of fifteen pharmaceutical products with the option to enter into long-term API supply contracts. 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’’). On July 26, 2015, Teva proposed to acquire Allergan’s generic pharmaceutical business for approximately $40.5 billion. The Commission alleges in its Complaint that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 E:\FR\FM\05AUN1.SGM 05AUN1 51894 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by lessening current or future competition in pharmaceutical markets for one or more strengths of ninety-four pharmaceutical products 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. mstockstill on DSK3G9T082PROD with NOTICES I. The Products and Structure of the Markets a. Horizontal Competition in Pharmaceutical Markets Generic drugs are chemically and therapeutically equivalent to branded drugs. When a physician prescribes a particular branded drug, a pharmacy may only dispense that branded drug or its generic equivalent, which is ‘‘ABrated’’ to the branded product. State laws permit or require pharmacies to automatically substitute the generic equivalent for the prescribed branded drug unless a physician expressly states not to do so. The 1984 Hatch-Waxman Act provides the statutory framework for the Food and Drug Administration (‘‘FDA’’) to approve generic drugs. Under HatchWaxman, a generic drug manufacturer can rely on an already-approved branded drug’s safety and efficacy data in its own application—called an Abbreviated New Drug Application (‘‘ANDA’’)—to the FDA, substantially lowering the research and development cost of the generic drug. Upon FDA approval, a generic drug typically launches at a discount to the branded drug’s price. When there is only one generic drug on the market, the branded drug usually competes with the generic drug on price, either directly or through an authorized generic version. As subsequent generic drugs launch, a generic-only market typically forms, with competition among generics driving pricing. When multiple generic drugs are available, customers usually substitute between the generics only— not the branded drug—and solicit bids exclusively from generic drug suppliers. Teva’s proposed acquisition of Allergan’s generic pharmaceutical business will lessen current or future competition by reducing the number of current or future suppliers in the pharmaceutical markets for one or more strengths of seventy-nine pharmaceutical products. Those markets fall into three categories: (1) Current competition between Teva and Allergan; (2) future competition between Teva and Allergan in an existing generic market; and (3) future competition VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 Æ Armodafinil Oral Tablet, 200 mg Æ Desogestrel/Ethinyl Estradiol Oral Tablet, 0.025/0.1 mg then 0.025/0.125 mg then 0.025/0.15 mg (AB-rated to Cyclessa) Æ Estazolam Oral Tablet, 1 mg Æ Estazolam Oral Tablet, 2 mg Æ Ethinyl Estradiol/Ethynodiol Diacetate Oral Tablet, 0.035/1mg (ABrated to Demulen 1/35) Æ Ethinyl Estradiol/Norethindrone Oral Tablet, 0.035/1mg (AB-rated to TriNorinyl 28-Day) Æ Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral Tablet, 0.02/0.03/0.035/1/1/1 mg (AB-rated to Estrostep FE) Æ Metoclopramide HCl Oral Tablet, 5 mg Æ Trimipramine Maleate Oral Capsule, 25 mg Æ Trimipramine Maleate Oral Capsule, 50 mg Æ Trimipramine Maleate Oral Capsule, 100 mg Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet 0.03/0.04/0.03/0.05/0.075/ 0.125 mg (AB-rated to Triphasil-28) Æ Ethinyl Estradiol/Norethindrone Oral Tablet, 0.035/0.5mg (AB-rated to Modicon 28) Æ Ethinyl Estradiol/Norgestrel Oral Tablet, 0.03/0.3mg (AB-rated to Lo/ Ovral-28) Æ Fludarabine Lyopholized Vial Injection, 50 mg Æ Fluocinonide Topical Cream, 0.05% Æ Flutamide Oral Capsule, 125 mg Æ Griseofulvin Microcrystalline Oral Liquid Suspension, 125 mg/5 mL Æ Metoclopramide HCl Oral Tablet, 10 mg Æ Mirtazapine Oral Disintegrating Tab, 15 mg Æ Mirtazapine Oral Disintegrating Tab, 30 mg Æ Mirtazapine Oral Disintegrating Tab, 45 mg Æ Nabumetone Oral Tablet, 500 mg Æ Nabumetone Oral Tablet, 750 mg Æ Nortriptyline HCl Oral Capsule, 10 mg Æ Nortriptyline HCl Oral Capsule, 25 mg Æ Nortriptyline HCl Oral Capsule, 50 mg Æ Nortriptyline HCl Oral Capsule, 75 mg Æ Tamoxifen Citrate Oral Tablet, 10 mg Æ Tamoxifen Citrate Oral Tablet, 20 mg Æ Trimethoprim Oral Tablet, 100 mg • Current Competition Between Teva and Allergan, 3-to-2 Supplier Consolidation • Current Competition Between Teva and Allergan, 4-to-3 Supplier Consolidation Æ Budesonide Inhalation Suspension, 0.25 mg/2 mL Æ Budesonide Inhalation Suspension, 0.5 mg/2 mL Æ Clarithromycin Extended Release Oral Tablet, 500 mg Æ Clonidine HCl Extended Release Transdermal Film, 0.1 mg/24 hr Æ Clonidine HCl Extended Release Transdermal Film, 0.2 mg/24 hr Æ Clonidine HCl Extended Release Transdermal Film, 0.3 mg/24 hr Æ Cyclosporine Oral Solution, 100 mg/ mL Æ Desmopressin Acetate Oral Tablet, 0.1 mg Æ Desogestrel/Ethinyl Estradiol/Ethinyl Estradiol Oral Tablet, 0.15/0.02 mg/ 0.01 mg (AB-rated to Mircette) Æ Disopyramide Phosphate Oral Capsule, 100 mg Æ Disopyramide Phosphate Oral Capsule, 150 mg Æ Estradiol Oral Tablet, 0.5 mg Æ Estradiol Oral Tablet, 1 mg Æ Estradiol Oral Tablet, 2 mg Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.1mg (AB-rated to Levlite-28) Æ Acitretin Oral Capsule, 17.5 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ Dextroamphetamine Sulfate Oral Capsule, 5 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ Dextroamphetamine Sulfate Oral Capsule, 10 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ Dextroamphetamine Sulfate Oral Capsule, 15 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ Dextroamphetamine Sulfate Oral Capsule, 20 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ Dextroamphetamine Sulfate Oral Capsule, 25 mg Æ Amphetamine Aspartate/ Amphetamine Sulfate/ Dextroamphetamine Saccharate/ between Teva and Allergan in a future generic market (i.e., the generic market has not yet formed and only the branded drug is on the market). Absent a remedy, the proposed acquisition would reduce the number of suppliers in each market as indicated below. • Current Competition Between Teva and Allergan, 2-to-1 Supplier Consolidation PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 E:\FR\FM\05AUN1.SGM 05AUN1 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ Æ mstockstill on DSK3G9T082PROD with NOTICES Æ Æ Æ Æ Æ Æ Æ Æ Æ Dextroamphetamine Sulfate Oral Capsule, 30 mg Carbidopa/Levodopa Oral Tablet, 10/ 100 mg Carbidopa/Levodopa Oral Tablet, 25/ 100 mg Carbidopa/Levodopa Oral Tablet, 25/ 250 mg Cyclosporine Oral Capsule, 25 mg Cyclosporine Oral Capsule, 100 mg Desmopressin Acetate Oral Tablet, 0.2 mg Dexmethylphenidate HCl Extended Release Oral Capsule, 5 mg Dexmethylphenidate HCl Extended Release Oral Capsule, 10 mg Dexmethylphenidate HCl Extended Release Oral Capsule, 20 mg Dextroamphetamine Sulfate Extended Release Oral Capsule, 5 mg Dextroamphetamine Sulfate Extended Release Oral Capsule, 10 mg Dextroamphetamine Sulfate Extended Release Oral Capsule, 15 mg Diazepam Oral Tablet, 2 mg Diazepam Oral Tablet, 5 mg Diazepam Oral Tablet, 10 mg Epirubicin Injection Vial 50 mg/25 mL Epirubicin Injection Vial 200 mg/100 mL Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.01/0.1mg (AB-rated to Lo Seasonique) Ethinyl Estradiol/Norethindrone Acetate Oral Tablet, 0.02/1mg (ABrated to Loestrin 21 1/20) Ethinyl Estradiol/Norethindrone Acetate Oral Tablet, 0.03/1.5mg (ABrated to Loestrin 21 1.5/30) Glyburide/Metformin HC1 Oral Tablet, 1.25/250 mg Glyburide/Metformin HCl Oral Tablet, 2.5/500 mg Glyburide/Metformin HCl Oral Tablet, 5/500 mg Hydroxyzine Pamoate Oral Capsule, 25 mg Hydroxyzine Pamoate Oral Capsule, 50 mg Levalbuterol HCl Inhalation Solution, 0.0103% Levalbuterol HCl Inhalation Solution, 0.0210% Levalbuterol HCl Inhalation Solution, 0.042% Minocycline HCl Oral Capsule, 50 mg Minocycline HCl Oral Capsule, 75 mg Minocycline HCl Oral Capsule, 100 mg Nitrofurantoin Oral Capsules, 50 mg Nitrofurantoin Oral Capsules, 100 mg Propofol Injection Emulsion, 10 mg/ mL 20 mL vial Propofol Injection Emulsion, 10 mg/ mL 50 mL vial Propofol Injection Emulsion, 10 mg/ mL 100 mL vial Propranolol HCl Oral Tablet, 10 mg VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 Æ Propranolol HCl Oral Tablet, 20 mg Æ Propranolol HCl Oral Tablet, 40 mg Æ Propranolol HCl Oral Tablet, 80 mg • Current Competition Between Teva and Allergan, 5-to-4 Supplier Consolidation Æ Acitretin Oral Capsule, 10 mg Æ Acitretin Oral Capsule, 25 mg Æ Alendronate Sodium Oral Tablet, 35 mg Æ Buspirone HCl Oral Tablet, 15 mg Æ Clozapine Oral Tablet, 25 mg Æ Clozapine Oral Tablet, 100 mg Æ Drospirenone/Ethinyl Estradiol Oral Tablet, 3/0.03 mg (AB-rated to Yasmin-28) Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.1 mg (AB-rated to Alesse-28) Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.03/0.15 mg (AB-rated to Nordette) Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.03/0.01/0.15 mg (AB-rated to Seasonique) Æ Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral Tablet, 0.02/1 mg (AB-rated to Loestrin FE 1/ 20) Æ Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral Tablet, 0.03/1.5 mg (AB-rated to Loestrin FE 1.5/30) Æ Norethindrone Oral Tablet, 0.35 mg (AB-rated to Micronor 28) Æ Norethindrone Oral Tablet, 0.35 mg (AB-rated to Nor-QD) • Future Competition Between Teva and Allergan in an Existing Generic Market, 3-to-2 Supplier Consolidation Æ Budesonide Inhalation Suspension, 1 mg/2 mL Æ Fluocinonide Cream Emulsified Base 0.05% Æ Methylphenidate HCl Extended Release Capsule, 20 mg Æ Methylphenidate HCl Extended Release Capsule, 30 mg Æ Methylphenidate HCl Extended Release Capsule, 40 mg • Future Competition Between Teva and Allergan in an Existing Generic Market, 4-to-3 Supplier Consolidation Æ Aspirin/Dipyridamole Extended Release Oral Capsule 25/200 mg • Future Competition Between Teva and Allergan in an Existing Generic Market, 5-to-4 Supplier Consolidation Æ Benzoyl Peroxide/Clindamycin Phosphate Gel, 5%/1% Æ Clozapine Oral Tablet, 200 mg Æ Methotrexate Injection, 25 mg/mL in 2 mL vial Æ Methotrexate Injection, 25 mg/mL in 10 mL vial PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 51895 Æ Methylphenidate HCl Extended Release Tablet, 18 mg Æ Methylphenidate HCl Extended Release Tablet, 27 mg Æ Methylphenidate HCl Extended Release Tablet, 36 mg Æ Methylphenidate HCl Extended Release Tablet, 54 mg Æ Tobramycin Inhalant Solution, 300 mg/5 mL • Future Competition Between Teva and Allergan in a Future Generic Market, 2-to-1 Supplier Consolidation Æ Methylphenidate HCl Extended Release Capsule, 10 mg Æ Ramelteon Tablet, 8 mg • Future Competition Between Teva and Allergan in a Future Generic Market, 3-to-2 Supplier Consolidation Æ Buprenorphine/Naloxone Buccal Film, 12/3 mg Æ Buprenorphine/Naloxone Buccal Film, 4/1 mg Æ Ethinyl Estradiol/Etonogestrel Vaginal Ring 0.015mg/24hr; 0.012mg/ 24hr Æ NAB Paclitaxel Injectable Suspension, 100 mg/vial Æ Phentermine HCl/Topiramate Extended Release Capsule, 11.25/69 mg Æ Phentermine HCl/Topiramate Extended Release Capsule, 15/92 mg Æ Phentermine HCl/Topiramate Extended Release Capsule, 3.75/23 mg Æ Phentermine HCl/Topiramate Extended Release Capsule, 7.5/46 mg Æ Rotigotine Transdermal Patch, 1 mg Æ Rotigotine Transdermal Patch, 2 mg Æ Rotigotine Transdermal Patch, 3 mg Æ Rotigotine Transdermal Patch, 4 mg Æ Rotigotine Transdermal Patch, 6 mg Æ Rotigotine Transdermal Patch, 8 mg • Future Competition Between Teva and Allergan in a Future Generic Market, 4-to-3 Supplier Consolidation Æ Buprenorphine/Naloxone Buccal Film, 2/0.5 mg Æ Buprenorphine/Naloxone Buccal Film, 8/2 mg Æ Dienogest/Estradiol Valerate and Estradiol Valerate Oral Tablet, 3 mg, 2/2 mg, 3/2 mg, 1 mg (AB-rated to Natazia) Æ Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.15 mg; 0.025/0.15 mg; 0.03 mg/0.15 mg; 0.01 mg (AB-rated to Quartette) Æ Ezetimibe/Simvastatin Tablets, 10/10 mg Æ Ezetimibe/Simvastatin Tablets, 10/20 mg Æ Ezetimibe/Simvastatin Tablets, 10/40 mg Æ Ezetimibe/Simvastatin Tablets, 10/80 mg E:\FR\FM\05AUN1.SGM 05AUN1 51896 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices Æ Imiquimod Topical Cream, 3.75% Æ Four pipeline products 2 • Future Competition Between Teva and Allergan in a Future Generic Market, 5-to-4 Supplier Consolidation Æ Dexmethylphenidate HCl Extended Release Oral Capsule, 25 mg Æ Dexmethylphenidate HCl Extended Release Oral Capsule, 35 mg Æ Fentanyl Buccal Tablet, 100 mcg Æ Fentanyl Buccal Tablet, 200 mcg Æ Fentanyl Buccal Tablet, 400 mcg Æ Fentanyl Buccal Tablet, 600 mcg Æ Fentanyl Buccal Tablet, 800 mcg Æ Metformin HCl/Saxagliptin Extended Release Tablet, 500/5 mg Æ Metformin HCl/Saxagliptin Extended Release Tablet, 1000/2.5 mg Æ Metformin HCl/Saxagliptin Extended Release Tablet, 1000/5 mg b. API Supply and Competition in Pharmaceutical Markets mstockstill on DSK3G9T082PROD with NOTICES APIs are central inputs in the manufacture of finished dose form pharmaceutical products. API supply sources must be designated in a drug’s FDA marketing authorization. Switching to a non-designated API source requires a drug maker to supplement its New Drug Application or ANDA, a process that can take as long as two years or even more. Consequently, a generic drug manufacturer’s API supply options are limited to the sources qualified under its ANDA. If only one API supplier is qualified under an ANDA, the ANDA holder has no immediate recourse if its designated API supplier elects to raise its prices or refuse to supply. Teva is world’s largest API supplier and supplies API to Allergan’s competitors in a number of generic markets. The proposed acquisition may lessen current or future competition in fifteen pharmaceutical products markets by creating the incentive and ability for Teva to foreclose rival suppliers of fifteen newly acquired Allergan pharmaceutical products by withholding supply of the following eight Teva API products: • Betamethasone dipropionate API; • Betamethasone valerate API; • Clobetasol propionate API; • Desonide API; • Fluocinolone API; 2 Teva’s and Allergan’s independent development projects for two overlapping pharmaceutical products are not public, and their existence is confidential business information. But for the proposed acquisition, certain strengths of the Teva and Allergan products would likely compete in four future markets. To preserve the confidentiality of these development programs, the specific future markets in which these products would compete are not identified in this document, and references to these products have been redacted from the public version of the Complaint. VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 • Fluorouracil API; • Probenecid API; and • Triamcinolone acetonide API. The fifteen downstream pharmaceutical markets in which competition would be lessened as a result of the acquisition are: • Betamethasone dipropionate augmented ointment, 0.05%; • Betamethasone dipropionate cream, 0.05%; • Betamethasone dipropionate lotion, 0.05%; • Betamethasone dipropionate ointment, 0.05%; • Betamethasone valerate cream, 0.1%; • Betamethasone valerate ointment, 0.1%; • Clobetasol propionate shampoo, 0.05%; • Clobetasol propionate ointment, 0.05%; • Desonide cream, 0.05%; • Probenecid tablets, 500 mg; • Probenecid/colchicine tablets, 500 mg/0.5 mg; • Nystatin/triamcinolone acetonide cream, 100,000 units/gm/0.1%; • Nystatin/triamcinolone acetonide ointment, 100,000 units/gm/0.1%; and • Two pipeline products.3 II. Entry Entry into these pharmaceutical markets would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the proposed acquisition. Introducing generic pharmaceutical products is costly and lengthy due to drug development times and regulatory requirements, including approval by the FDA. Additionally, it can take up to two years for an API manufacturer to qualify as a new API supplier for a generic pharmaceutical product, leaving the generic pharmaceutical product with no alternative to its existing qualified API supplier or suppliers. III. Effects The proposed acquisition likely would cause significant anticompetitive harm by eliminating current or future competition in markets for one or more strengths of seventy-nine pharmaceutical products where the parties currently sell or are developing generic drugs. In each of these markets, 3 Allergan has not yet made public the development of two pharmaceutical products that would likely compete with products for which Teva supplies API. To preserve the confidentiality of these Allergan development programs, the specific markets in which these likely future products would compete are not identified in this document, and references to these products have been redacted from the public version of the Complaint. PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 Teva and Allergan are two of a limited number of current or likely future suppliers in the United States. Customers and competitors have observed that the price of generic pharmaceutical products decreases with new entry even after several suppliers have entered the market. Removal of an independent generic pharmaceutical supplier from the relevant markets in which Teva and Allergan currently compete would result in significantly higher prices post-acquisition. Similarly, the elimination of a future independent competitor would prevent the price decreases that are likely to result from the firm’s entry. Thus, absent a remedy, the proposed acquisition would likely result in significantly higher prices for these generic drugs. Additionally, the proposed acquisition likely would cause competitive harm in markets for fifteen pharmaceutical products in which Teva supplies API for a generic pharmaceutical product that currently competes or will compete in the near future with an Allergan generic pharmaceutical product. Those generic pharmaceutical markets already have or will have a limited number of competitors, some of which are supplied API by Teva. Teva has the ability to foreclose these competitors by denying them API from their only approved source. Post-acquisition, Teva would have the incentive to foreclose one or more competitors because the lost API sales would be less than the recouped profits on additional sales gained from the foreclosed competitor(s) and the increased prices. Such foreclosure would harm consumers because market concentration and price would result in significantly higher prices. IV. The Consent Agreement The remedy reflected in the proposed Consent Agreement would eliminate the likely anticompetitive effects of the proposed acquisition by requiring the parties to divest rights and assets related to the pharmaceutical products in each relevant market. The acquirers are: Mayne Pharma Group Ltd. (‘‘Mayne’’), Impax Laboratories, Inc. (‘‘Impax’’), Dr. Reddy’s Laboratories Ltd. (‘‘Dr. Reddy’s’’), Sagent Pharmaceuticals, Inc. (‘‘Sagent’’), Cipla Limited (‘‘Cipla’’), Zydus Worldwide DMCC (‘‘Zydus’’), Mikah Pharma LLC (‘‘Mikah’’), Perrigo Pharma International D.A.C. (‘‘Perrigo’’), Aurobindo Pharma USA, Inc. (‘‘Aurobindo’’), Prasco LLC (‘‘Prasco’’), and 3M Company (‘‘3M’’) (collectively, the ‘‘Acquirers’’). The parties must E:\FR\FM\05AUN1.SGM 05AUN1 mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices divest the products no later than ten days after the acquisition. The Commission’s goal in evaluating possible acquirers of divested assets is to maintain the competitive environment that existed prior to the acquisition. The Commission thoroughly reviewed the assets to be divested, the transitional services to be provided by Teva, and the capabilities and plans of each Acquirer. The interim monitors, who will oversee the divestiture process, have worked closely with Commission staff to ensure the viability of the divestiture and anticipate logistical and technical challenges. Additionally, Teva—in conjunction with the Acquirers, Allergan, and interim monitors—has prepared a comprehensive divestiture plan to guide the process of transferring the divested products to their new proposed owners. If the Commission determines that an Acquirer is not acceptable, or that the manner of the divestitures is not acceptable, the parties must unwind the sale or release of rights to that Acquirer 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 provisions to help ensure the divestitures are successful. The parties must take all action to maintain the economic viability, marketability, and competitiveness of the divestiture products until they are divested. The parties must provide transitional services to the Acquirers to assist them in establishing independent manufacturing capabilities. These transitional services include technical assistance to manufacture the divestiture products in substantially the same manner and quality employed or achieved by the parties, as well as advice and training from knowledgeable employees. The goal of the transitional services is to ensure that the acquirers will be able to operate independently of the parties in the manufacture and sale of the divested products. The proposed Consent Agreement also requires the parties to supply product to the Acquirers so that the Acquirers can market them independently while the parties transfer the associated technology to the production facilities of the Acquirer or its chosen third-party manufacturer(s). The Consent Agreement allows sufficient time to complete the manufacturing transfers, and for products in development, to gain FDA approval before completing VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 manufacturing transfers. To ensure that the buyers of divestiture products for which Teva or Allergan supply API will have access to adequate supplies of reasonably priced API until they are able to qualify alternative suppliers, the proposed Consent Agreement requires Teva to supply API for up to four years after closing at prices not to exceed those set forth in binding letters of intent, recently executed by Teva and the buyers. Nothing in the Consent Agreement precludes the buyers from sourcing other divestiture product inputs from Teva on a negotiated basis. In addition, to address the anticompetitive effects likely to arise in the fifteen pharmaceutical markets where Teva supplies API to Allergan competitors, the Consent Agreement requires Teva to give API customers in those markets the option of entering into long-term API supply contracts. Teva must notify each affected API customer of the option to enter a contract within ten days of consummating the proposed acquisition, and such customers may exercise their options at any point up to three years after the date of the Consent Agreement. Any such API supply contracts executed pursuant to the option shall be renewable for up three years after the date of the Consent Agreement, which will give the customers sufficient time to qualify alternative API suppliers if they wish to do so. 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. Statement of the Federal Trade Commission in the Matter of Teva Pharmaceuticals Industries Ltd. and Allergan plc The Commission has accepted a proposed consent order in connection with Teva Pharmaceutical Industries Ltd.’s proposed acquisition of the generic pharmaceutical business of Allergan plc. We believe the consent order remedies the anticompetitive effects that would otherwise likely result from this transaction by requiring the divestiture of nearly 80 drug products to buyers that appear well positioned to replicate the competition that would have occurred absent the merger. The consent order includes a number of safeguards to help achieve our remedial goals. Both Teva and Allergan are global pharmaceutical companies that are among the largest suppliers of generic pharmaceuticals in the United States. Teva is currently the largest generic PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 51897 drug company in the United States, with an overall generic market share of approximately 13%; Allergan is third, accounting for approximately 9% of generic sales.1 Although this merger combines two large sellers of generic drugs, the generic pharmaceutical industry as a whole remains relatively unconcentrated. Over two hundred firms sell generic drugs in the United States and the five largest suppliers account only for about half of overall generic sales. Following this transaction, the combined firm will likely have a 22% share of industrywide sales across all generic product markets. Despite the industry’s relatively low concentration, the Commission appreciates that the price, quality, and availability of generic pharmaceutical products have a significant impact on American consumers’ daily lives and on healthcare costs nationwide. We therefore looked closely at every possible aspect of this transaction that could result in competitive harm. We examined not only particular product overlaps but also whether the combination between Teva and Allergan would result in other adverse consequences to competition. Our comprehensive investigation included the review of extensive documents from the merging parties and other industry players as well as interviews with dozens of customers and more than 50 competitors. We concluded that the substantial divestitures required by the consent order resolve the competitive concerns resulting from the transaction. The Complaint and Remedy As detailed in our complaint, we have reason to believe that, absent a remedy, the transaction would likely substantially reduce competition in 79 markets for pharmaceutical products, including oral contraceptives, steroidal medications, mental health drugs, and many other products. These markets include individual strengths of pharmaceutical products where Teva and Allergan currently offer competing products as well as products where there would likely be future competition absent the merger because one or both of the parties are developing competing products.2 To remedy the likely 1 This market share data is based on 2014 IMS gross sales data. 2 In addition to selling finished pharmaceutical products, Teva and Allergan also sell active pharmaceutical ingredients (API) to many thirdparty drug manufacturers, including parties that will now compete with the merged entity. Where the number of competitors in the finished product market is limited, the Commission determined that this vertical relationship could raise competitive E:\FR\FM\05AUN1.SGM Continued 05AUN1 51898 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices anticompetitive effects in each of the relevant markets, the consent order requires the divestiture of the products and related assets to specific acquirers that the Commission has closely vetted and approved. Where at least one dosage strength raised a competitive concern, we required Teva to divest all strengths. These divestitures, and the other relief contained in the proposed consent order, are designed to maintain competition in the relevant markets. In settling this case, we rely on the Commission’s extensive experience with divestitures in the pharmaceutical industry, including prior divestitures involving Teva and Allergan and have structured the divestitures in a way to minimize potential risks. This includes breaking the divested products into smaller packages to ease the load on any single buyer and requiring Teva to divest the easier-to-divest product of the overlapping products whenever possible. We also undertook an extensive review process to ensure that the divestiture buyers are acceptable and have the resources they need to compete successfully in the relevant markets. The buyers have identified third-party contract research organizations or contract manufacturers they intend to use and provided us with executed contracts. We involved interim monitors early in the divestiture negotiation process to ensure a smooth divestiture process and harmonize Teva’s technological transfer plans with those of the acquirors of the divested assets. And we are requiring Teva to dedicate a full-time organization to implement the technology transfers and other measures necessary to effectuate the divestitures. Other Potential Theories of Harm mstockstill on DSK3G9T082PROD with NOTICES In assessing whether the combination of the parties’ generic businesses would harm competition or create a firm with a greater ability to engage in anticompetitive conduct, we evaluated three additional potential theories of harm beyond individual product overlaps. First, we considered whether the merger would likely lead to anticompetitive effects from the bundling of generic products. Although both Teva and Allergan have broad generic drug portfolios today, the concerns in markets for finished drug products by creating the incentive and ability for Teva to raise prices or withhold supply where third parties source from the merged firm. To address these concerns, the order requires Teva to provide affected customers with the option of entering into long-term API supply contracts to ensure that they have an adequate supply of API until they are able to qualify alternative suppliers. VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 evidence did not show that the breadth of their portfolios significantly affects their ability to win business in individual drug product markets. Nor have they been able to use their portfolios to foreclose smaller competitors. Even with one of the broadest generic product portfolios in the industry, Teva’s overall share of U.S. generic prescriptions has steadily declined from 2010 to 2015, and the share of total prescriptions filled by the five largest generic suppliers has similarly fallen during this period. Generic sales occur at the individual product level, and customers sometimes even break up purchases by specific strengths to obtain more favorable pricing. As a result, smaller firms with much smaller portfolios compete headto-head against larger generic firms and are the leading suppliers in the markets for many individual generic treatments. Additionally, purchasers actively seek to diversify their supplier base by sourcing from smaller suppliers. On the facts here, we concluded that anticompetitive effects arising from the merged company’s portfolio of products are unlikely to occur. Second, we examined whether the merger would likely decrease incentives to challenge the patents held by brandname pharmaceutical companies and bring new generic drugs to market. The regulatory framework governing generic pharmaceuticals, the Hatch-Waxman Act, provides specific procedures for identifying and resolving patent disputes related to new generic drugs. Under the Hatch-Waxman Act, a company seeking to introduce a new generic drug may file what is commonly known as a ‘‘Paragraph IV challenge’’ to a brand-name pharmaceutical product’s patent. This filing triggers a process, including potential litigation, to resolve patent issues surrounding the proposed generic product’s entry into the marketplace. We considered whether the merger would likely result in fewer or less effective Paragraph IV challenges, but the evidence did not support such a conclusion. A major incentive to file Paragraph IV challenges is the 180-day exclusivity period awarded to the first generic drug that the Food and Drug Administration approves in a market. The financial rewards associated with this ‘‘first-to-file’’ exclusivity period provide a strong incentive for generic drug companies of all sizes to challenge brand drug patents and litigate against brand drug companies. Indeed, first-tofile Paragraph IV challenges are not concentrated among a small group of firms. To the contrary, many firms, including small ones, have been active PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 and successful first filers. In 2014, for example, twenty-five different companies were the first to file Paragraph IV challenges. For eight of those companies, that was their very first Paragraph IV challenge. Thus, while Teva and Allergan have actively filed Paragraph IV challenges, we found no evidence that either one has been better positioned to win the first-to-file race or that they have substantially greater incentives or ability to succeed in Paragraph IV challenges than many other generic companies. Nor did we see evidence that a merger between the two would diminish the combined firm’s incentive to continue to pursue Paragraph IV challenges. Finally, we analyzed whether the proposed transaction might dampen incentives to develop new generic products. For example, certain types of generic drugs are especially difficult to develop. For the most part, however, the parties’ in-house technical capabilities to develop complex generic drugs do not overlap. And to the extent that there are complex products for which both companies have engaged in development efforts, we found that there are a number of other firms with similar capabilities such that the transaction would not substantially lessen competition. Moreover, generic firms, including the merging parties, often partner with third parties (e.g., specialized contract development and manufacturing organizations) to obtain the technical capability to develop complex generic drugs. These types of partnership options will remain after the merger. The consent order addresses individual markets where the merger was likely to harm competition, including markets for difficult-todevelop products that are currently in the parties’ pipelines. Conclusion We therefore concluded that the proposed merger is unlikely to produce anticompetitive effects beyond the markets discussed above. That conclusion is necessarily limited to the facts of this case. Another set of facts presented by a different transaction might lead us to find that there are competitive concerns that extend beyond markets for individual pharmaceutical products. The extensive investigation and detailed consent order reflect the Commission’s dedication to ensuring that pharmaceutical markets, including generic markets, remain competitive. We will continue to take enforcement actions, where appropriate, to ensure that any merger or acquisition complies with the antitrust laws and does not E:\FR\FM\05AUN1.SGM 05AUN1 Federal Register / Vol. 81, No. 151 / Friday, August 5, 2016 / Notices undermine competition in the pharmaceutical industry. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2016–18562 Filed 8–4–16; 8:45 am] BILLING CODE 6750–01–P FEDERAL TRADE COMMISSION [File No. 1623034, Docket No. C–4580] Very Incognito Technologies, Inc., Doing Business as Vipvape Federal Trade Commission. ACTION: Consent order. AGENCY: The Commission has approved a final consent order in this matter, settling alleged violations of federal law prohibiting deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the Complaint and the terms of the Decision and Order. DATES: Issued on June 21, 2016. SUPPLEMENTARY INFORMATION: SUMMARY: mstockstill on DSK3G9T082PROD with NOTICES Analysis of Agreement Containing Consent Order To Aid Public Comment The Federal Trade Commission (‘‘FTC’’ or ‘‘Commission’’) has approved a final consent order applicable to Very Incognito Technologies, Inc. dba Vipvape (‘‘Vipvape’’). The consent order was placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period became part of the public record. After the public comment period, the Commission reviewed the agreement and the comments received, and determined to make the proposed order final. This matter concerns allegedly false representations that Vipvape made to consumers concerning its participation in the Asia-Pacific Economic Cooperation (‘‘APEC’’) Cross Border Privacy Rules (‘‘CBPR’’) system. The APEC CBPR system is a voluntary, enforceable mechanism that certifies a company’s compliance with the principles in the CBPR and facilitates privacy-respecting transfers of data amongst APEC member economies. The APEC CBPR system is based on nine data privacy principles: Preventing harm, notice, collection limitation, use choice, integrity, security safeguards, access and correction, and accountability. Companies that seek to participate in the APEC CBPR system must undergo a review by an APECrecognized Accountability Agent, which VerDate Sep<11>2014 17:42 Aug 04, 2016 Jkt 238001 certifies companies that meet the standards. Companies under the FTC’s jurisdiction are eligible to apply for APEC CBPR certification. The names of certified companies are posted on a public-facing Web site, www.cbprs.org. Companies must re-apply annually in order to retain their status as current participants in the APEC CBPR system. A company that falsely claims APEC CBPR participation may be subject to an enforcement action based on the FTC’s deception authority under Section 5 of the FTC Act. Vipvape makes and distributes handheld vaporizers. According to the Commission’s complaint, Vipvape has set forth on its Web site, https:// www.vipvape.com/content/legal/ warranty/privacy, privacy policies and statements about its practices, including statements related to its participation in the APEC CBPR system. The Commission’s complaint alleges that Vipvape falsely represented that it was a participant in the APEC CBPR system when, in fact, it never sought or obtained certification. Part I of the order prohibits Vipvape from making misrepresentations about its participation in any privacy or security program sponsored by a government or any self-regulatory or standard-setting organization, including, but not limited to, the APEC CBPR system. Parts II through VI of the order are reporting and compliance provisions. Part II requires acknowledgment of the order and dissemination of the order now and in the future to persons with responsibilities relating to the subject matter of the order. Part III ensures notification to the FTC of changes in corporate status and mandates that Vipvape submit an initial compliance report to the FTC. Part IV requires Vipvape to retain documents relating to its compliance with the order for a fiveyear period. Part V mandates that Vipvape make available to the FTC information or subsequent compliance reports, as requested. Part VI is a provision that ‘‘sunsets’’ the order on June 21, 2036, with certain exceptions. The purpose of this analysis, which was placed on the Commission Web site on May 4, 2016, was to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or order or to modify the order’s terms in any way. PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 51899 By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2016–18566 Filed 8–4–16; 8:45 am] BILLING CODE 6750–01–P FEDERAL TRADE COMMISSION [File No. 161–0102] Mylan N.V.; Analysis To Aid Public Comment 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 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 August 29, 2016. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ mylanmedaconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ‘‘In the Matter of Mylan N.V., File No. 161–0102—Consent Agreement’’ on your comment and file your comment online at https:// ftcpublic.commentworks.com/ftc/ mylanmedaconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘In the Matter of Mylan N.V., File No. 161–0102—Consent Agreement’’ 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: Christina Perez (202–326–2350), 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 consent orders to cease and desist, having been filed with and accepted, subject to final SUMMARY: E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Notices]
[Pages 51892-51899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18562]


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FEDERAL TRADE COMMISSION

[File No. 151 0196]


Teva Pharmaceutical Industries Ltd. and Allergan plc; Analysis 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 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 August 29, 2016.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/tevaallerganconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section

[[Page 51893]]

below. Write ``In the Matter of Teva Pharmaceutical Industries Ltd. and 
Allergan plc, File No. 151-0196, C-4589--Consent Agreement'' on your 
comment and file your comment online at https://ftcpublic.commentworks.com/ftc/tevaallerganconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``In the Matter of Teva Pharmaceutical Industries Ltd. 
and Allergan plc, File No. 151-0196, C-4589--Consent Agreement'' 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: Michael Moiseyev (202-326-3106), 
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 consent orders 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 July 27, 2016), 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 August 29, 2016. 
Write ``In the Matter of Teva Pharmaceutical Industries Ltd. and 
Allergan plc, File No. 151-0196, C-4589--Consent Agreement'' 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).
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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/tevaallerganconsent 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 ``In the Matter of Teva 
Pharmaceutical Industries Ltd. and Allergan plc, File No. 151-0196, C-
4589--Consent Agreement'' 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. 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 August 29, 2016. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at 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 Teva Pharmaceutical Industries Ltd. (``Teva'') and 
Allergan plc (``Allergan''), which is designed to remedy the 
anticompetitive effects resulting from Teva's proposed acquisition of 
Allergan's generic pharmaceutical business. The proposed Consent 
Agreement requires the parties (1) to divest rights and assets related 
to pharmaceutical markets for one or more strengths of seventy-nine 
pharmaceutical products and (2) provide certain Teva active 
pharmaceutical ingredient (``API'') customers that market one or more 
of fifteen pharmaceutical products with the option to enter into long-
term API supply contracts.
    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'').
    On July 26, 2015, Teva proposed to acquire Allergan's generic 
pharmaceutical business for approximately $40.5 billion. The Commission 
alleges in its Complaint that the proposed acquisition, if consummated, 
would violate Section 7 of the Clayton Act, as amended, 15

[[Page 51894]]

U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as 
amended, 15 U.S.C. 45, by lessening current or future competition in 
pharmaceutical markets for one or more strengths of ninety-four 
pharmaceutical products 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

a. Horizontal Competition in Pharmaceutical Markets

    Generic drugs are chemically and therapeutically equivalent to 
branded drugs. When a physician prescribes a particular branded drug, a 
pharmacy may only dispense that branded drug or its generic equivalent, 
which is ``AB-rated'' to the branded product. State laws permit or 
require pharmacies to automatically substitute the generic equivalent 
for the prescribed branded drug unless a physician expressly states not 
to do so.
    The 1984 Hatch-Waxman Act provides the statutory framework for the 
Food and Drug Administration (``FDA'') to approve generic drugs. Under 
Hatch-Waxman, a generic drug manufacturer can rely on an already-
approved branded drug's safety and efficacy data in its own 
application--called an Abbreviated New Drug Application (``ANDA'')--to 
the FDA, substantially lowering the research and development cost of 
the generic drug. Upon FDA approval, a generic drug typically launches 
at a discount to the branded drug's price. When there is only one 
generic drug on the market, the branded drug usually competes with the 
generic drug on price, either directly or through an authorized generic 
version. As subsequent generic drugs launch, a generic-only market 
typically forms, with competition among generics driving pricing. When 
multiple generic drugs are available, customers usually substitute 
between the generics only--not the branded drug--and solicit bids 
exclusively from generic drug suppliers.
    Teva's proposed acquisition of Allergan's generic pharmaceutical 
business will lessen current or future competition by reducing the 
number of current or future suppliers in the pharmaceutical markets for 
one or more strengths of seventy-nine pharmaceutical products. Those 
markets fall into three categories: (1) Current competition between 
Teva and Allergan; (2) future competition between Teva and Allergan in 
an existing generic market; and (3) future competition between Teva and 
Allergan in a future generic market (i.e., the generic market has not 
yet formed and only the branded drug is on the market). Absent a 
remedy, the proposed acquisition would reduce the number of suppliers 
in each market as indicated below.
 Current Competition Between Teva and Allergan, 2-to-1 Supplier 
Consolidation
[cir] Armodafinil Oral Tablet, 200 mg
[cir] Desogestrel/Ethinyl Estradiol Oral Tablet, 0.025/0.1 mg then 
0.025/0.125 mg then 0.025/0.15 mg (AB-rated to Cyclessa)
[cir] Estazolam Oral Tablet, 1 mg
[cir] Estazolam Oral Tablet, 2 mg
[cir] Ethinyl Estradiol/Ethynodiol Diacetate Oral Tablet, 0.035/1mg 
(AB-rated to Demulen 1/35)
[cir] Ethinyl Estradiol/Norethindrone Oral Tablet, 0.035/1mg (AB-rated 
to Tri-Norinyl 28-Day)
[cir] Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral 
Tablet, 0.02/0.03/0.035/1/1/1 mg (AB-rated to Estrostep FE)
[cir] Metoclopramide HCl Oral Tablet, 5 mg
[cir] Trimipramine Maleate Oral Capsule, 25 mg
[cir] Trimipramine Maleate Oral Capsule, 50 mg
[cir] Trimipramine Maleate Oral Capsule, 100 mg
 Current Competition Between Teva and Allergan, 3-to-2 Supplier 
Consolidation
[cir] Budesonide Inhalation Suspension, 0.25 mg/2 mL
[cir] Budesonide Inhalation Suspension, 0.5 mg/2 mL
[cir] Clarithromycin Extended Release Oral Tablet, 500 mg
[cir] Clonidine HCl Extended Release Transdermal Film, 0.1 mg/24 hr
[cir] Clonidine HCl Extended Release Transdermal Film, 0.2 mg/24 hr
[cir] Clonidine HCl Extended Release Transdermal Film, 0.3 mg/24 hr
[cir] Cyclosporine Oral Solution, 100 mg/mL
[cir] Desmopressin Acetate Oral Tablet, 0.1 mg
[cir] Desogestrel/Ethinyl Estradiol/Ethinyl Estradiol Oral Tablet, 
0.15/0.02 mg/0.01 mg (AB-rated to Mircette)
[cir] Disopyramide Phosphate Oral Capsule, 100 mg
[cir] Disopyramide Phosphate Oral Capsule, 150 mg
[cir] Estradiol Oral Tablet, 0.5 mg
[cir] Estradiol Oral Tablet, 1 mg
[cir] Estradiol Oral Tablet, 2 mg
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.1mg (AB-
rated to Levlite-28)
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet 0.03/0.04/0.03/0.05/
0.075/0.125 mg (AB-rated to Triphasil-28)
[cir] Ethinyl Estradiol/Norethindrone Oral Tablet, 0.035/0.5mg (AB-
rated to Modicon 28)
[cir] Ethinyl Estradiol/Norgestrel Oral Tablet, 0.03/0.3mg (AB-rated to 
Lo/Ovral-28)
[cir] Fludarabine Lyopholized Vial Injection, 50 mg
[cir] Fluocinonide Topical Cream, 0.05%
[cir] Flutamide Oral Capsule, 125 mg
[cir] Griseofulvin Microcrystalline Oral Liquid Suspension, 125 mg/5 mL
[cir] Metoclopramide HCl Oral Tablet, 10 mg
[cir] Mirtazapine Oral Disintegrating Tab, 15 mg
[cir] Mirtazapine Oral Disintegrating Tab, 30 mg
[cir] Mirtazapine Oral Disintegrating Tab, 45 mg
[cir] Nabumetone Oral Tablet, 500 mg
[cir] Nabumetone Oral Tablet, 750 mg
[cir] Nortriptyline HCl Oral Capsule, 10 mg
[cir] Nortriptyline HCl Oral Capsule, 25 mg
[cir] Nortriptyline HCl Oral Capsule, 50 mg
[cir] Nortriptyline HCl Oral Capsule, 75 mg
[cir] Tamoxifen Citrate Oral Tablet, 10 mg
[cir] Tamoxifen Citrate Oral Tablet, 20 mg
[cir] Trimethoprim Oral Tablet, 100 mg
 Current Competition Between Teva and Allergan, 4-to-3 Supplier 
Consolidation
[cir] Acitretin Oral Capsule, 17.5 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/Dextroamphetamine Sulfate Oral Capsule, 5 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/Dextroamphetamine Sulfate Oral Capsule, 10 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/Dextroamphetamine Sulfate Oral Capsule, 15 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/Dextroamphetamine Sulfate Oral Capsule, 20 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/Dextroamphetamine Sulfate Oral Capsule, 25 mg
[cir] Amphetamine Aspartate/Amphetamine Sulfate/Dextroamphetamine 
Saccharate/

[[Page 51895]]

Dextroamphetamine Sulfate Oral Capsule, 30 mg
[cir] Carbidopa/Levodopa Oral Tablet, 10/100 mg
[cir] Carbidopa/Levodopa Oral Tablet, 25/100 mg
[cir] Carbidopa/Levodopa Oral Tablet, 25/250 mg
[cir] Cyclosporine Oral Capsule, 25 mg
[cir] Cyclosporine Oral Capsule, 100 mg
[cir] Desmopressin Acetate Oral Tablet, 0.2 mg
[cir] Dexmethylphenidate HCl Extended Release Oral Capsule, 5 mg
[cir] Dexmethylphenidate HCl Extended Release Oral Capsule, 10 mg
[cir] Dexmethylphenidate HCl Extended Release Oral Capsule, 20 mg
[cir] Dextroamphetamine Sulfate Extended Release Oral Capsule, 5 mg
[cir] Dextroamphetamine Sulfate Extended Release Oral Capsule, 10 mg
[cir] Dextroamphetamine Sulfate Extended Release Oral Capsule, 15 mg
[cir] Diazepam Oral Tablet, 2 mg
[cir] Diazepam Oral Tablet, 5 mg
[cir] Diazepam Oral Tablet, 10 mg
[cir] Epirubicin Injection Vial 50 mg/25 mL
[cir] Epirubicin Injection Vial 200 mg/100 mL
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.01/0.1mg 
(AB-rated to Lo Seasonique)
[cir] Ethinyl Estradiol/Norethindrone Acetate Oral Tablet, 0.02/1mg 
(AB-rated to Loestrin 21 1/20)
[cir] Ethinyl Estradiol/Norethindrone Acetate Oral Tablet, 0.03/1.5mg 
(AB-rated to Loestrin 21 1.5/30)
[cir] Glyburide/Metformin HC1 Oral Tablet, 1.25/250 mg
[cir] Glyburide/Metformin HCl Oral Tablet, 2.5/500 mg
[cir] Glyburide/Metformin HCl Oral Tablet, 5/500 mg
[cir] Hydroxyzine Pamoate Oral Capsule, 25 mg
[cir] Hydroxyzine Pamoate Oral Capsule, 50 mg
[cir] Levalbuterol HCl Inhalation Solution, 0.0103%
[cir] Levalbuterol HCl Inhalation Solution, 0.0210%
[cir] Levalbuterol HCl Inhalation Solution, 0.042%
[cir] Minocycline HCl Oral Capsule, 50 mg
[cir] Minocycline HCl Oral Capsule, 75 mg
[cir] Minocycline HCl Oral Capsule, 100 mg
[cir] Nitrofurantoin Oral Capsules, 50 mg
[cir] Nitrofurantoin Oral Capsules, 100 mg
[cir] Propofol Injection Emulsion, 10 mg/mL 20 mL vial
[cir] Propofol Injection Emulsion, 10 mg/mL 50 mL vial
[cir] Propofol Injection Emulsion, 10 mg/mL 100 mL vial
[cir] Propranolol HCl Oral Tablet, 10 mg
[cir] Propranolol HCl Oral Tablet, 20 mg
[cir] Propranolol HCl Oral Tablet, 40 mg
[cir] Propranolol HCl Oral Tablet, 80 mg
 Current Competition Between Teva and Allergan, 5-to-4 Supplier 
Consolidation
[cir] Acitretin Oral Capsule, 10 mg
[cir] Acitretin Oral Capsule, 25 mg
[cir] Alendronate Sodium Oral Tablet, 35 mg
[cir] Buspirone HCl Oral Tablet, 15 mg
[cir] Clozapine Oral Tablet, 25 mg
[cir] Clozapine Oral Tablet, 100 mg
[cir] Drospirenone/Ethinyl Estradiol Oral Tablet, 3/0.03 mg (AB-rated 
to Yasmin-28)
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.1 mg (AB-
rated to Alesse-28)
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.03/0.15 mg (AB-
rated to Nordette)
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.03/0.01/0.15 mg 
(AB-rated to Seasonique)
[cir] Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral 
Tablet, 0.02/1 mg (AB-rated to Loestrin FE 1/20)
[cir] Ethinyl Estradiol/Norethindrone Acetate/Ferrous Fumarate Oral 
Tablet, 0.03/1.5 mg (AB-rated to Loestrin FE 1.5/30)
[cir] Norethindrone Oral Tablet, 0.35 mg (AB-rated to Micronor 28)
[cir] Norethindrone Oral Tablet, 0.35 mg (AB-rated to Nor-QD)
 Future Competition Between Teva and Allergan in an Existing 
Generic Market, 3-to-2 Supplier Consolidation
[cir] Budesonide Inhalation Suspension, 1 mg/2 mL
[cir] Fluocinonide Cream Emulsified Base 0.05%
[cir] Methylphenidate HCl Extended Release Capsule, 20 mg
[cir] Methylphenidate HCl Extended Release Capsule, 30 mg
[cir] Methylphenidate HCl Extended Release Capsule, 40 mg
 Future Competition Between Teva and Allergan in an Existing 
Generic Market, 4-to-3 Supplier Consolidation
[cir] Aspirin/Dipyridamole Extended Release Oral Capsule 25/200 mg
 Future Competition Between Teva and Allergan in an Existing 
Generic Market, 5-to-4 Supplier Consolidation
[cir] Benzoyl Peroxide/Clindamycin Phosphate Gel, 5%/1%
[cir] Clozapine Oral Tablet, 200 mg
[cir] Methotrexate Injection, 25 mg/mL in 2 mL vial
[cir] Methotrexate Injection, 25 mg/mL in 10 mL vial
[cir] Methylphenidate HCl Extended Release Tablet, 18 mg
[cir] Methylphenidate HCl Extended Release Tablet, 27 mg
[cir] Methylphenidate HCl Extended Release Tablet, 36 mg
[cir] Methylphenidate HCl Extended Release Tablet, 54 mg
[cir] Tobramycin Inhalant Solution, 300 mg/5 mL
 Future Competition Between Teva and Allergan in a Future 
Generic Market, 2-to-1 Supplier Consolidation
[cir] Methylphenidate HCl Extended Release Capsule, 10 mg
[cir] Ramelteon Tablet, 8 mg
 Future Competition Between Teva and Allergan in a Future 
Generic Market, 3-to-2 Supplier Consolidation
[cir] Buprenorphine/Naloxone Buccal Film, 12/3 mg
[cir] Buprenorphine/Naloxone Buccal Film, 4/1 mg
[cir] Ethinyl Estradiol/Etonogestrel Vaginal Ring 0.015mg/24hr; 
0.012mg/24hr
[cir] NAB Paclitaxel Injectable Suspension, 100 mg/vial
[cir] Phentermine HCl/Topiramate Extended Release Capsule, 11.25/69 mg
[cir] Phentermine HCl/Topiramate Extended Release Capsule, 15/92 mg
[cir] Phentermine HCl/Topiramate Extended Release Capsule, 3.75/23 mg
[cir] Phentermine HCl/Topiramate Extended Release Capsule, 7.5/46 mg
[cir] Rotigotine Transdermal Patch, 1 mg
[cir] Rotigotine Transdermal Patch, 2 mg
[cir] Rotigotine Transdermal Patch, 3 mg
[cir] Rotigotine Transdermal Patch, 4 mg
[cir] Rotigotine Transdermal Patch, 6 mg
[cir] Rotigotine Transdermal Patch, 8 mg
 Future Competition Between Teva and Allergan in a Future 
Generic Market, 4-to-3 Supplier Consolidation
[cir] Buprenorphine/Naloxone Buccal Film, 2/0.5 mg
[cir] Buprenorphine/Naloxone Buccal Film, 8/2 mg
[cir] Dienogest/Estradiol Valerate and Estradiol Valerate Oral Tablet, 
3 mg, 2/2 mg, 3/2 mg, 1 mg (AB-rated to Natazia)
[cir] Ethinyl Estradiol/Levonorgestrel Oral Tablet, 0.02/0.15 mg; 
0.025/0.15 mg; 0.03 mg/0.15 mg; 0.01 mg (AB-rated to Quartette)
[cir] Ezetimibe/Simvastatin Tablets, 10/10 mg
[cir] Ezetimibe/Simvastatin Tablets, 10/20 mg
[cir] Ezetimibe/Simvastatin Tablets, 10/40 mg
[cir] Ezetimibe/Simvastatin Tablets, 10/80 mg

[[Page 51896]]

[cir] Imiquimod Topical Cream, 3.75%
[cir] Four pipeline products \2\
---------------------------------------------------------------------------

    \2\ Teva's and Allergan's independent development projects for 
two overlapping pharmaceutical products are not public, and their 
existence is confidential business information. But for the proposed 
acquisition, certain strengths of the Teva and Allergan products 
would likely compete in four future markets. To preserve the 
confidentiality of these development programs, the specific future 
markets in which these products would compete are not identified in 
this document, and references to these products have been redacted 
from the public version of the Complaint.
---------------------------------------------------------------------------

 Future Competition Between Teva and Allergan in a Future 
Generic Market, 5-to-4 Supplier Consolidation
[cir] Dexmethylphenidate HCl Extended Release Oral Capsule, 25 mg
[cir] Dexmethylphenidate HCl Extended Release Oral Capsule, 35 mg
[cir] Fentanyl Buccal Tablet, 100 mcg
[cir] Fentanyl Buccal Tablet, 200 mcg
[cir] Fentanyl Buccal Tablet, 400 mcg
[cir] Fentanyl Buccal Tablet, 600 mcg
[cir] Fentanyl Buccal Tablet, 800 mcg
[cir] Metformin HCl/Saxagliptin Extended Release Tablet, 500/5 mg
[cir] Metformin HCl/Saxagliptin Extended Release Tablet, 1000/2.5 mg
[cir] Metformin HCl/Saxagliptin Extended Release Tablet, 1000/5 mg

b. API Supply and Competition in Pharmaceutical Markets

    APIs are central inputs in the manufacture of finished dose form 
pharmaceutical products. API supply sources must be designated in a 
drug's FDA marketing authorization. Switching to a non-designated API 
source requires a drug maker to supplement its New Drug Application or 
ANDA, a process that can take as long as two years or even more. 
Consequently, a generic drug manufacturer's API supply options are 
limited to the sources qualified under its ANDA. If only one API 
supplier is qualified under an ANDA, the ANDA holder has no immediate 
recourse if its designated API supplier elects to raise its prices or 
refuse to supply.
    Teva is world's largest API supplier and supplies API to Allergan's 
competitors in a number of generic markets. The proposed acquisition 
may lessen current or future competition in fifteen pharmaceutical 
products markets by creating the incentive and ability for Teva to 
foreclose rival suppliers of fifteen newly acquired Allergan 
pharmaceutical products by withholding supply of the following eight 
Teva API products:
     Betamethasone dipropionate API;
     Betamethasone valerate API;
     Clobetasol propionate API;
     Desonide API;
     Fluocinolone API;
     Fluorouracil API;
     Probenecid API; and
     Triamcinolone acetonide API.
    The fifteen downstream pharmaceutical markets in which competition 
would be lessened as a result of the acquisition are:
     Betamethasone dipropionate augmented ointment, 0.05%;
     Betamethasone dipropionate cream, 0.05%;
     Betamethasone dipropionate lotion, 0.05%;
     Betamethasone dipropionate ointment, 0.05%;
     Betamethasone valerate cream, 0.1%;
     Betamethasone valerate ointment, 0.1%;
     Clobetasol propionate shampoo, 0.05%;
     Clobetasol propionate ointment, 0.05%;
     Desonide cream, 0.05%;
     Probenecid tablets, 500 mg;
     Probenecid/colchicine tablets, 500 mg/0.5 mg;
     Nystatin/triamcinolone acetonide cream, 100,000 units/gm/
0.1%;
     Nystatin/triamcinolone acetonide ointment, 100,000 units/
gm/0.1%; and
     Two pipeline products.\3\
---------------------------------------------------------------------------

    \3\ Allergan has not yet made public the development of two 
pharmaceutical products that would likely compete with products for 
which Teva supplies API. To preserve the confidentiality of these 
Allergan development programs, the specific markets in which these 
likely future products would compete are not identified in this 
document, and references to these products have been redacted from 
the public version of the Complaint.
---------------------------------------------------------------------------

II. Entry

    Entry into these pharmaceutical markets would not be timely, 
likely, or sufficient in magnitude, character, and scope to deter or 
counteract the anticompetitive effects of the proposed acquisition. 
Introducing generic pharmaceutical products is costly and lengthy due 
to drug development times and regulatory requirements, including 
approval by the FDA. Additionally, it can take up to two years for an 
API manufacturer to qualify as a new API supplier for a generic 
pharmaceutical product, leaving the generic pharmaceutical product with 
no alternative to its existing qualified API supplier or suppliers.

III. Effects

    The proposed acquisition likely would cause significant 
anticompetitive harm by eliminating current or future competition in 
markets for one or more strengths of seventy-nine pharmaceutical 
products where the parties currently sell or are developing generic 
drugs. In each of these markets, Teva and Allergan are two of a limited 
number of current or likely future suppliers in the United States. 
Customers and competitors have observed that the price of generic 
pharmaceutical products decreases with new entry even after several 
suppliers have entered the market. Removal of an independent generic 
pharmaceutical supplier from the relevant markets in which Teva and 
Allergan currently compete would result in significantly higher prices 
post-acquisition. Similarly, the elimination of a future independent 
competitor would prevent the price decreases that are likely to result 
from the firm's entry. Thus, absent a remedy, the proposed acquisition 
would likely result in significantly higher prices for these generic 
drugs.
    Additionally, the proposed acquisition likely would cause 
competitive harm in markets for fifteen pharmaceutical products in 
which Teva supplies API for a generic pharmaceutical product that 
currently competes or will compete in the near future with an Allergan 
generic pharmaceutical product. Those generic pharmaceutical markets 
already have or will have a limited number of competitors, some of 
which are supplied API by Teva. Teva has the ability to foreclose these 
competitors by denying them API from their only approved source. Post-
acquisition, Teva would have the incentive to foreclose one or more 
competitors because the lost API sales would be less than the recouped 
profits on additional sales gained from the foreclosed competitor(s) 
and the increased prices. Such foreclosure would harm consumers because 
market concentration and price would result in significantly higher 
prices.

IV. The Consent Agreement

    The remedy reflected in the proposed Consent Agreement would 
eliminate the likely anticompetitive effects of the proposed 
acquisition by requiring the parties to divest rights and assets 
related to the pharmaceutical products in each relevant market. The 
acquirers are: Mayne Pharma Group Ltd. (``Mayne''), Impax Laboratories, 
Inc. (``Impax''), Dr. Reddy's Laboratories Ltd. (``Dr. Reddy's''), 
Sagent Pharmaceuticals, Inc. (``Sagent''), Cipla Limited (``Cipla''), 
Zydus Worldwide DMCC (``Zydus''), Mikah Pharma LLC (``Mikah''), Perrigo 
Pharma International D.A.C. (``Perrigo''), Aurobindo Pharma USA, Inc. 
(``Aurobindo''), Prasco LLC (``Prasco''), and 3M Company (``3M'') 
(collectively, the ``Acquirers''). The parties must

[[Page 51897]]

divest the products no later than ten days after the acquisition.
    The Commission's goal in evaluating possible acquirers of divested 
assets is to maintain the competitive environment that existed prior to 
the acquisition. The Commission thoroughly reviewed the assets to be 
divested, the transitional services to be provided by Teva, and the 
capabilities and plans of each Acquirer. The interim monitors, who will 
oversee the divestiture process, have worked closely with Commission 
staff to ensure the viability of the divestiture and anticipate 
logistical and technical challenges. Additionally, Teva--in conjunction 
with the Acquirers, Allergan, and interim monitors--has prepared a 
comprehensive divestiture plan to guide the process of transferring the 
divested products to their new proposed owners. If the Commission 
determines that an Acquirer is not acceptable, or that the manner of 
the divestitures is not acceptable, the parties must unwind the sale or 
release of rights to that Acquirer 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 provisions to help ensure 
the divestitures are successful. The parties must take all action to 
maintain the economic viability, marketability, and competitiveness of 
the divestiture products until they are divested. The parties must 
provide transitional services to the Acquirers to assist them in 
establishing independent manufacturing capabilities. These transitional 
services include technical assistance to manufacture the divestiture 
products in substantially the same manner and quality employed or 
achieved by the parties, as well as advice and training from 
knowledgeable employees. The goal of the transitional services is to 
ensure that the acquirers will be able to operate independently of the 
parties in the manufacture and sale of the divested products. The 
proposed Consent Agreement also requires the parties to supply product 
to the Acquirers so that the Acquirers can market them independently 
while the parties transfer the associated technology to the production 
facilities of the Acquirer or its chosen third-party manufacturer(s). 
The Consent Agreement allows sufficient time to complete the 
manufacturing transfers, and for products in development, to gain FDA 
approval before completing manufacturing transfers. To ensure that the 
buyers of divestiture products for which Teva or Allergan supply API 
will have access to adequate supplies of reasonably priced API until 
they are able to qualify alternative suppliers, the proposed Consent 
Agreement requires Teva to supply API for up to four years after 
closing at prices not to exceed those set forth in binding letters of 
intent, recently executed by Teva and the buyers. Nothing in the 
Consent Agreement precludes the buyers from sourcing other divestiture 
product inputs from Teva on a negotiated basis.
    In addition, to address the anticompetitive effects likely to arise 
in the fifteen pharmaceutical markets where Teva supplies API to 
Allergan competitors, the Consent Agreement requires Teva to give API 
customers in those markets the option of entering into long-term API 
supply contracts. Teva must notify each affected API customer of the 
option to enter a contract within ten days of consummating the proposed 
acquisition, and such customers may exercise their options at any point 
up to three years after the date of the Consent Agreement. Any such API 
supply contracts executed pursuant to the option shall be renewable for 
up three years after the date of the Consent Agreement, which will give 
the customers sufficient time to qualify alternative API suppliers if 
they wish to do so.
    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.

Statement of the Federal Trade Commission in the Matter of Teva 
Pharmaceuticals Industries Ltd. and Allergan plc

    The Commission has accepted a proposed consent order in connection 
with Teva Pharmaceutical Industries Ltd.'s proposed acquisition of the 
generic pharmaceutical business of Allergan plc. We believe the consent 
order remedies the anticompetitive effects that would otherwise likely 
result from this transaction by requiring the divestiture of nearly 80 
drug products to buyers that appear well positioned to replicate the 
competition that would have occurred absent the merger. The consent 
order includes a number of safeguards to help achieve our remedial 
goals.
    Both Teva and Allergan are global pharmaceutical companies that are 
among the largest suppliers of generic pharmaceuticals in the United 
States. Teva is currently the largest generic drug company in the 
United States, with an overall generic market share of approximately 
13%; Allergan is third, accounting for approximately 9% of generic 
sales.\1\ Although this merger combines two large sellers of generic 
drugs, the generic pharmaceutical industry as a whole remains 
relatively unconcentrated. Over two hundred firms sell generic drugs in 
the United States and the five largest suppliers account only for about 
half of overall generic sales. Following this transaction, the combined 
firm will likely have a 22% share of industry-wide sales across all 
generic product markets.
---------------------------------------------------------------------------

    \1\ This market share data is based on 2014 IMS gross sales 
data.
---------------------------------------------------------------------------

    Despite the industry's relatively low concentration, the Commission 
appreciates that the price, quality, and availability of generic 
pharmaceutical products have a significant impact on American 
consumers' daily lives and on healthcare costs nationwide. We therefore 
looked closely at every possible aspect of this transaction that could 
result in competitive harm. We examined not only particular product 
overlaps but also whether the combination between Teva and Allergan 
would result in other adverse consequences to competition. Our 
comprehensive investigation included the review of extensive documents 
from the merging parties and other industry players as well as 
interviews with dozens of customers and more than 50 competitors. We 
concluded that the substantial divestitures required by the consent 
order resolve the competitive concerns resulting from the transaction.

The Complaint and Remedy

    As detailed in our complaint, we have reason to believe that, 
absent a remedy, the transaction would likely substantially reduce 
competition in 79 markets for pharmaceutical products, including oral 
contraceptives, steroidal medications, mental health drugs, and many 
other products. These markets include individual strengths of 
pharmaceutical products where Teva and Allergan currently offer 
competing products as well as products where there would likely be 
future competition absent the merger because one or both of the parties 
are developing competing products.\2\ To remedy the likely

[[Page 51898]]

anticompetitive effects in each of the relevant markets, the consent 
order requires the divestiture of the products and related assets to 
specific acquirers that the Commission has closely vetted and approved. 
Where at least one dosage strength raised a competitive concern, we 
required Teva to divest all strengths. These divestitures, and the 
other relief contained in the proposed consent order, are designed to 
maintain competition in the relevant markets.
---------------------------------------------------------------------------

    \2\ In addition to selling finished pharmaceutical products, 
Teva and Allergan also sell active pharmaceutical ingredients (API) 
to many third-party drug manufacturers, including parties that will 
now compete with the merged entity. Where the number of competitors 
in the finished product market is limited, the Commission determined 
that this vertical relationship could raise competitive concerns in 
markets for finished drug products by creating the incentive and 
ability for Teva to raise prices or withhold supply where third 
parties source from the merged firm. To address these concerns, the 
order requires Teva to provide affected customers with the option of 
entering into long-term API supply contracts to ensure that they 
have an adequate supply of API until they are able to qualify 
alternative suppliers.
---------------------------------------------------------------------------

    In settling this case, we rely on the Commission's extensive 
experience with divestitures in the pharmaceutical industry, including 
prior divestitures involving Teva and Allergan and have structured the 
divestitures in a way to minimize potential risks. This includes 
breaking the divested products into smaller packages to ease the load 
on any single buyer and requiring Teva to divest the easier-to-divest 
product of the overlapping products whenever possible. We also 
undertook an extensive review process to ensure that the divestiture 
buyers are acceptable and have the resources they need to compete 
successfully in the relevant markets. The buyers have identified third-
party contract research organizations or contract manufacturers they 
intend to use and provided us with executed contracts. We involved 
interim monitors early in the divestiture negotiation process to ensure 
a smooth divestiture process and harmonize Teva's technological 
transfer plans with those of the acquirors of the divested assets. And 
we are requiring Teva to dedicate a full-time organization to implement 
the technology transfers and other measures necessary to effectuate the 
divestitures.

Other Potential Theories of Harm

    In assessing whether the combination of the parties' generic 
businesses would harm competition or create a firm with a greater 
ability to engage in anticompetitive conduct, we evaluated three 
additional potential theories of harm beyond individual product 
overlaps.
    First, we considered whether the merger would likely lead to 
anticompetitive effects from the bundling of generic products. Although 
both Teva and Allergan have broad generic drug portfolios today, the 
evidence did not show that the breadth of their portfolios 
significantly affects their ability to win business in individual drug 
product markets. Nor have they been able to use their portfolios to 
foreclose smaller competitors. Even with one of the broadest generic 
product portfolios in the industry, Teva's overall share of U.S. 
generic prescriptions has steadily declined from 2010 to 2015, and the 
share of total prescriptions filled by the five largest generic 
suppliers has similarly fallen during this period. Generic sales occur 
at the individual product level, and customers sometimes even break up 
purchases by specific strengths to obtain more favorable pricing. As a 
result, smaller firms with much smaller portfolios compete head-to-head 
against larger generic firms and are the leading suppliers in the 
markets for many individual generic treatments. Additionally, 
purchasers actively seek to diversify their supplier base by sourcing 
from smaller suppliers. On the facts here, we concluded that 
anticompetitive effects arising from the merged company's portfolio of 
products are unlikely to occur.
    Second, we examined whether the merger would likely decrease 
incentives to challenge the patents held by brand-name pharmaceutical 
companies and bring new generic drugs to market. The regulatory 
framework governing generic pharmaceuticals, the Hatch-Waxman Act, 
provides specific procedures for identifying and resolving patent 
disputes related to new generic drugs. Under the Hatch-Waxman Act, a 
company seeking to introduce a new generic drug may file what is 
commonly known as a ``Paragraph IV challenge'' to a brand-name 
pharmaceutical product's patent. This filing triggers a process, 
including potential litigation, to resolve patent issues surrounding 
the proposed generic product's entry into the marketplace.
    We considered whether the merger would likely result in fewer or 
less effective Paragraph IV challenges, but the evidence did not 
support such a conclusion. A major incentive to file Paragraph IV 
challenges is the 180-day exclusivity period awarded to the first 
generic drug that the Food and Drug Administration approves in a 
market. The financial rewards associated with this ``first-to-file'' 
exclusivity period provide a strong incentive for generic drug 
companies of all sizes to challenge brand drug patents and litigate 
against brand drug companies. Indeed, first-to-file Paragraph IV 
challenges are not concentrated among a small group of firms. To the 
contrary, many firms, including small ones, have been active and 
successful first filers. In 2014, for example, twenty-five different 
companies were the first to file Paragraph IV challenges. For eight of 
those companies, that was their very first Paragraph IV challenge. 
Thus, while Teva and Allergan have actively filed Paragraph IV 
challenges, we found no evidence that either one has been better 
positioned to win the first-to-file race or that they have 
substantially greater incentives or ability to succeed in Paragraph IV 
challenges than many other generic companies. Nor did we see evidence 
that a merger between the two would diminish the combined firm's 
incentive to continue to pursue Paragraph IV challenges.
    Finally, we analyzed whether the proposed transaction might dampen 
incentives to develop new generic products. For example, certain types 
of generic drugs are especially difficult to develop. For the most 
part, however, the parties' in-house technical capabilities to develop 
complex generic drugs do not overlap. And to the extent that there are 
complex products for which both companies have engaged in development 
efforts, we found that there are a number of other firms with similar 
capabilities such that the transaction would not substantially lessen 
competition. Moreover, generic firms, including the merging parties, 
often partner with third parties (e.g., specialized contract 
development and manufacturing organizations) to obtain the technical 
capability to develop complex generic drugs. These types of partnership 
options will remain after the merger. The consent order addresses 
individual markets where the merger was likely to harm competition, 
including markets for difficult-to-develop products that are currently 
in the parties' pipelines.

Conclusion

    We therefore concluded that the proposed merger is unlikely to 
produce anticompetitive effects beyond the markets discussed above. 
That conclusion is necessarily limited to the facts of this case. 
Another set of facts presented by a different transaction might lead us 
to find that there are competitive concerns that extend beyond markets 
for individual pharmaceutical products.
    The extensive investigation and detailed consent order reflect the 
Commission's dedication to ensuring that pharmaceutical markets, 
including generic markets, remain competitive. We will continue to take 
enforcement actions, where appropriate, to ensure that any merger or 
acquisition complies with the antitrust laws and does not

[[Page 51899]]

undermine competition in the pharmaceutical industry.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-18562 Filed 8-4-16; 8:45 am]
 BILLING CODE 6750-01-P