Abbott Laboratories and Alere Inc.; Analysis To Aid Public Comment, 46241-46243 [2017-21290]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Notices]
[Pages 46241-46243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21290]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 161 0084]


Abbott Laboratories and Alere Inc.; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

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 October 30, 2017.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of 
Abbott Laboratories and Alere Inc., File No. 161-0084'' on your 
comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/abbottalereconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``In the Matter of Abbott Laboratories and Alere Inc., 
File No. 161-0084'' 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: Aylin M. Skroejer, (202-326-2459), 
Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for September 28, 2017), on the World Wide Web, 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 30, 
2017. Write ``In the Matter of Abbott Laboratories and Alere Inc., File 
No. 161-0084'' on your comment. Your comment--including your name and 
your state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission Web 
site, at https://www.ftc.gov/policy/public-comments.
    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/abbottalereconsent by following the instructions on the web-based 
form. If this Notice appears at https://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you prefer to file your comment on paper, write ``In the Matter 
of Abbott Laboratories and Alere Inc., File No. 161-0084'' on your 
comment and on the envelope, and mail your comment to the following 
address: Federal Trade Commission, Office of the Secretary, 600 
Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, 
or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If 
possible, submit your paper comment to the Commission by courier or 
overnight service.
    Because your comment will be placed on the publicly accessible FTC 
Web site at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.

[[Page 46242]]

    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC Web site--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC Web site, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC Web site at https://www.ftc.gov to read this Notice 
and the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before October 30, 2017. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Abbott Laboratories (``Abbott'') and Alere Inc. 
(``Alere'') designed to remedy the anticompetitive effects resulting 
from Abbott's proposed acquisition of Alere. The proposed Decision and 
Order (``Order'') contained in the Consent Agreement requires the 
parties to divest all rights and assets related to Alere's point-of-
care blood gas testing business to Siemens Aktiengelsellschaft 
(``Siemens''), and all rights and assets related to Alere's point-of-
care cardiac marker testing business to Quidel Corporation 
(``Quidel'').
    The proposed Consent Agreement has been placed on the public record 
for thirty days for receipt of comments by interested persons. Comments 
received during this period will become part of the public record. 
After thirty days, the Commission will review the comments received and 
decide whether it should withdraw, modify, or make the Consent 
Agreement final.
    Under the terms of the Amendment to Agreement and Plan of Merger 
signed on April 13, 2017, which amends the Agreement and Plan of Merger 
signed on January 30, 2016, Abbott will acquire Alere in a transaction 
valued at approximately $8.3 billion, which includes Abbott's 
assumption of $3.0 billion in debt (the ``Acquisition''). The 
Commission's Complaint alleges that the proposed Acquisition, if 
consummated, would violate Section 7 of the Clayton Act, as amended, 15 
U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as 
amended, 15 U.S.C. 45, by substantially lessening competition in the 
U.S. markets for point-of-care blood gas testing systems and point-of-
care cardiac marker testing systems. The proposed Consent Agreement 
will remedy the alleged violations by preserving the competition that 
otherwise would be lost in these markets as a result of the proposed 
Acquisition.

The Parties

    Abbott, headquartered in Abbott Park, Illinois, is a global 
healthcare company with three business units in the United States: 
Diagnostic, nutritional, and vascular. Its diagnostic testing division 
provides an expansive portfolio of instruments, tests, software, and 
training to hospitals, laboratories, blood banks, and physician 
offices.
    Alere, headquartered in Waltham, Massachusetts, is a global leader 
in rapid diagnostic testing. Alere provides diagnostic equipment, 
consumables, and patient self-management tools for cardiometabolic 
disease, infectious disease, and toxicology.

The Relevant Products and Structure of the Markets

I. Point-of-Care Blood Gas Testing Systems

    Point-of-care blood gas testing systems are small, portable medical 
instruments that measure a patient's blood pH, oxygen, carbon dioxide, 
and electrolyte levels to assess lung and kidney function, as well as 
whether an acute patient requires oxygen or other urgent treatment. 
They provide results in less than five minutes at a patient's bedside 
or other acute care settings where fast turnaround time is critical, 
and rely on single-use, disposable test cartridges. Abbott and Alere 
offer the only handheld point-of-care blood gas testing devices, and 
other firms offer portable point-of-care models that range up to ten 
pounds in weight. Hospitals pay a substantial premium for the 
convenience of point-of-care blood gas testing equipment over the 
closest alternative, using larger benchtop analyzers that employ multi-
use packs of reagents and are typically located in a hospital 
laboratory or other centralized location for analysis. The vast 
majority of customers would not switch to benchtop blood gas testing 
systems in response to a small but significant increase in the price of 
point-of-care blood gas testing systems.
    Abbott and Alere are each other's closest competitors and the only 
significant suppliers in the U.S. market for point-of-care blood gas 
testing systems, accounting for 82% and 15% of 2016 sales, 
respectively. While IDEXX Laboratories, Inc. and LifeHealth LLC offer 
single-use, portable (but not handheld) systems, they are more distant 
competitors to Abbott and Alere and maintain fringe positions in the 
market.

II. Point-of-Care Cardiac Marker Testing Systems

    Point-of-care cardiac marker testing systems are small, portable 
medical instruments that measure specific proteins released into the 
blood to assess whether a patient experiencing chest pains is having a 
myocardial infarction or congestive heart failure. They allow for quick 
initial diagnoses at a patient's bedside, which is critical because the 
time between a cardiac event and treatment increases the likelihood the 
patient will suffer permanent loss of heart muscle. The convenience of 
point-of-care cardiac marker testing systems differentiates them from 
larger benchtop models that can only be located in a hospital 
laboratory or some other central area of larger emergency departments. 
A small but significant increase in the price of point-of-care cardiac 
marker testing systems would not cause customers to switch to benchtop 
cardiac marker testing systems.
    Abbott and Alere are the only significant suppliers of point-of-
care cardiac marker testing systems, accounting for approximately 87% 
and 13%, respectively, of the 2016 U.S. market. Abbott offers point-of-
care cardiac marker testing on a handheld analyzer, and Alere on a two-
pound portable analyzer. The next closest competitor to the parties is 
Response Biomedical, which offers a more complex technology and 
accounts for only a nominal share of the market.

[[Page 46243]]

The Relevant Geographic Market

    The relevant geographic market for point-of-care blood gas testing 
systems and point-of-care cardiac marker testing systems is the United 
States. These products are medical devices regulated by the U.S. Food 
and Drug Administration (``FDA''). Medical devices sold outside of the 
United States, but not approved for sale in the United States, do not 
provide viable competitive alternatives for U.S. consumers.

Competitive Effects of the Acquisition

    The proposed Acquisition would likely result in significant 
competitive harm to consumers in the markets for point-of-care blood 
gas testing systems and point-of-care cardiac marker testing systems. 
In each relevant market, customers are able to leverage Abbott and 
Alere against each other to obtain better prices and improved products. 
By eliminating this direct and substantial head-to-head competition, 
the proposed Acquisition likely would allow the combined firm to 
exercise market power unilaterally, resulting in higher prices, reduced 
innovation, and less choice for consumers.

Entry Conditions

    Entry in the relevant markets would not be timely, likely, or 
sufficient in magnitude, character, and scope to deter or counteract 
the anticompetitive effects of the proposed Acquisition. New entry 
would require significant investment of time and money for product 
research and development, regulatory approval by the FDA, and 
establishment of a U.S. sales and service infrastructure. Such 
development efforts are difficult, time-consuming, and expensive, and 
often fail to result in a competitive product reaching the market.

The Consent Agreement

    The Consent Agreement eliminates the competitive concerns raised by 
the proposed Acquisition by requiring Alere to divest: (1) Its point-
of-care blood gas testing business, including its Ottawa, Canada 
facilities, to Siemens; and (2) its point-of-care cardiac marker 
testing business, including its San Diego, California facility, to 
Quidel. Alere must divest all assets and rights to research, develop, 
manufacture, market, and sell its point-of-care blood gas testing and 
point-of-care cardiac marker testing product lines, including all 
related intellectual property and other confidential business 
information. Further, Siemens and Quidel intend to hire substantially 
all of Alere's employees whose responsibilities primarily relate to the 
research, development, manufacture, or sale of the relevant products. 
The provisions of the Consent Agreement ensure that Siemens and Quidel 
become independent, viable, and effective competitors in the respective 
markets in order to maintain the competition that currently exists.
    Siemens is a global conglomerate with a healthcare division that is 
one of the world's largest suppliers of technology to the healthcare 
industry and a leader in medical imaging and laboratory diagnostics. 
Siemens currently supplies a benchtop blood gas testing system, and 
Alere's handheld system will be highly complementary to Siemens' 
portfolio in the United States. Siemens has the expertise, U.S. sales 
infrastructure, and resources to restore the competition that otherwise 
would have been lost pursuant to the proposed Acquisition.
    Based in San Diego, California, Quidel develops, manufactures, and 
markets point-of-care diagnostic testing solutions globally. The 
company has expertise with immunoassay testing and currently focuses on 
infectious diseases, women's and general health, and gastrointestinal 
diseases. The acquisition of Alere's point-of-care cardiac marker 
testing business will complement Quidel's portfolio of rapid diagnostic 
testing solutions. Moreover, Quidel's chairman was co-inventor of 
Alere's point-of-care cardiac marker testing system, providing Quidel 
with additional understanding and background of the divestiture 
business.
    The parties must accomplish the divestitures no later than thirty 
days after the consummation of the Proposed Acquisition. If the 
Commission determines that either Siemens or Quidel is not an 
acceptable acquirer, or that the manner of the divestitures is not 
acceptable, the proposed Order requires the parties to unwind the sale 
of rights to Siemens and/or Quidel and then divest the products to a 
Commission-approved acquirer(s) within six months of the date the Order 
becomes final.
    The Commission has agreed to appoint a Monitor to ensure that 
Abbott and Alere comply with all of their obligations pursuant to the 
Consent Agreement and to keep the Commission informed about the status 
of the transfer of the rights and assets to Siemens and Quidel. The 
proposed Order further allows the Commission to appoint a trustee in 
the event the parties fail to divest the products as required.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-21290 Filed 10-3-17; 8:45 am]
 BILLING CODE 6750-01-P