Integra LifeSciences Holdings Corporation and Johnson & Johnson; Analysis To Aid Public Comment, 46238-46241 [2017-21291]
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46238
Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices
including but not limited to releases,
discharges, satisfactions, endorsements,
assignments and deeds. Effective
October 1, 2017, the Receivership Estate
has been terminated, the receiver
discharged, and the Receivership Estate
has ceased to exist as a legal entity.
Bancorp, Inc., and thereby indirectly
acquire voting shares of Mid Penn Bank,
both in Millersburg, Pennsylvania.
Board of Governors of the Federal Reserve
System, September 29, 2017.
Yao-Chin Chao,
Assistant Secretary of the Board.
Dated: September 29, 2017.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2017–21319 Filed 10–3–17; 8:45 am]
[FR Doc. 2017–21323 Filed 10–3–17; 8:45 am]
FEDERAL TRADE COMMISSION
BILLING CODE 6714–01–P
[File No. 171 0084]
FEDERAL RESERVE SYSTEM
Integra LifeSciences Holdings
Corporation and Johnson & Johnson;
Analysis To Aid Public Comment
BILLING CODE 6210–01–P
sradovich on DSK3GMQ082PROD with NOTICES
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications will also be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than October 30,
2017.
A. Federal Reserve Bank of
Philadelphia (William Spaniel, Senior
Vice President) 100 North 6th Street,
Philadelphia, Pennsylvania 19105–
1521. Comments can also be sent
electronically to
Comments.applications@phil.frb.org:
1. Lawrence Keister & Company,
Scottsdale, Pennsylvania; to acquire
additional voting shares of Mid Penn
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Jkt 244001
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 October 27, 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: ‘‘Integra LifeSciences et
al.; FTC File No. 1710084’’ on your
comment, and file your comment online
at https://ftcpublic.commentworks.com/
ftc/integradivest by following the
instructions on the web-based form. If
you prefer to file your comment on
paper, write ‘‘Integra LifeSciences et al.;
FTC File No. 1710084’’ 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
SUMMARY:
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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 27, 2017), on
the World Wide Web, at https://
www.ftc.gov/news-events/commissionactions.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before October 27, 2017. Write ‘‘Integra
LifeSciences et al.; FTC File No.
1710084’’ 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/
integradivest 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 ‘‘Integra LifeSciences et al.;
FTC File No. 1710084’’ 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
E:\FR\FM\04OCN1.SGM
04OCN1
sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices
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.
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 27, 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
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final approval, an Agreement
Containing Consent Orders (‘‘Consent
Agreement’’) from Integra LifeSciences
Holdings Corporation (‘‘Integra’’) and
Johnson & Johnson designed to remedy
the anticompetitive effects resulting
from Integra’s proposed purchase of
certain assets of Johnson & Johnson’s
Codman Neuro (‘‘Codman’’) division.
The proposed Decision and Order
(‘‘Order’’) contained in the Consent
Agreement requires the parties to divest
all rights and assets to Natus Medical
Incorporated (‘‘Natus’’) related to
Integra’s intracranial pressure
monitoring systems and fixed pressure
valve shunt systems, as well as
Codman’s cerebrospinal fluid collection
systems, non-antimicrobial external
ventricular drainage catheters, and dural
grafts.
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 Asset Purchase
Agreement signed on February 14, 2017,
Integra will acquire Codman in a
transaction valued at approximately
$1.0 billion (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
intracranial pressure monitoring
systems, cerebrospinal fluid collection
systems, non-antimicrobial external
ventricular drainage catheters, fixed
pressure valve shunt systems, and dural
grafts. 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
Integra, headquartered in Plainsboro,
New Jersey, is a medical device
company with worldwide operations
and one of the largest surgical
instrument suppliers in the United
States. The company has two U.S.
business units: Specialty Surgical
Solutions and Orthopedics and Tissue
Technologies. The Specialty Surgical
Solutions division offers instruments
and systems for, among other
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specialties, neurosurgery and critical
care.
Codman, part of Johnson & Johnson’s
DePuy Synthes Inc. business unit, is a
global medical device company that
offers a diverse portfolio of
neurosurgery, neurovascular, and drug
delivery products, including
instruments and systems for
hydrocephalus management,
neurointensive care, and cranial
surgery, as well as implantable drug
infusion systems. The proposed
transaction excludes Codman’s
neurovascular and drug delivery
businesses.
The Relevant Products and Structure of
the Markets
I. Intracranial Pressure Monitoring
Systems
Intracranial pressure monitoring
systems are used in intensive care units
and operating rooms to measure
pressure inside the skull, which can
increase in the event of traumatic brain
injury, hydrocephalus, intracranial
tumors, and other medical conditions.
An increase in intracranial pressure can
severely damage the brain or spinal cord
and is a common cause of death in
neurosurgical patients, making quick
detection of pressure buildup critical.
Intracranial pressure monitoring
systems use a pressure-sensitive probe
inserted through the skull to send
measurements via a transducer cable to
a monitor at the patient’s bedside.
Customers would not switch to an
alternative product in response to a
small but significant increase in the
price of intracranial pressure monitoring
systems.
Integra and Codman are the only
significant suppliers in the U.S. market
for intracranial pressure monitoring
systems, accounting for 68% and 26%
of 2016 sales, respectively. The
remainder of the market is comprised of
small, fringe competitors that have
limited competitive significance.
II. Cerebrospinal Fluid Collection
Systems
Cerebrospinal fluid collection systems
drain excess cerebrospinal fluid and
monitor pressures within the fluid.
They consist of a plastic drainage bag,
tubing, and other accessories that
connect to a patient through an external
ventricular drainage catheter. There are
no viable alternatives to cerebrospinal
fluid collection systems.
Integra, Codman, and Medtronic are
the only competitively significant
suppliers of cerebrospinal fluid
collection systems in the United States.
Integra is the leading supplier with 57%
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Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices
of the market. Medtronic accounts for an
additional 27% of the market, and
Codman has a share of 14%. The next
¨
closest competitor is Moller Medical,
which offers a more complex technology
and only accounts for a nominal share
of the market.
sradovich on DSK3GMQ082PROD with NOTICES
III. Non-Antimicrobial External
Ventricular Drainage Catheters
External ventricular drainage
catheters funnel excess cerebrospinal
fluid from the brain to cerebrospinal
fluid collection systems to relieve
intracranial pressure. External
ventricular drainage catheters are either
antimicrobial or non-antimicrobial, and
the two types constitute distinct
antitrust markets because of the
substantial differences between them.
Non-antimicrobial external ventricular
drainage catheters lack an antibiotic
coating and are suitable for less critical
patients; they also may be used to avoid
the risk of antibiotic interference when
diagnosing infections. They are
significantly less expensive than
antimicrobial external ventricular
drainage catheters. Customers would
not switch from non-antimicrobial
external ventricular drainage catheters
to the antimicrobial versions or any
other product in response to a 5% to
10% increase in the price of nonantimicrobial external ventricular
drainage catheters, in part because even
with such a price increase,
antimicrobial external ventricular
drainage catheters would still be
considerably more expensive.
Integra and Codman account for 29%
and 17% of the relevant market in the
United States. The only other
competitively significant firm is
Medtronic, with a 51% share.
IV. Fixed Pressure Valve Shunt Systems
Shunts are the primary tool that
neurosurgeons use to treat
hydrocephalus, or excessive
accumulation of cerebrospinal fluid.
Shunt systems redirect excess
cerebrospinal fluid from the brain or
spinal cord to another area of the body,
usually the abdomen, for reabsorption.
Shunt systems consist of three
components: A ventricular catheter
inserted into the brain, a valve to
regulate the flow of the fluid, and
another catheter that is threaded to the
location where the fluid is emptied.
Once implanted, the one-way valve in
the shunt system regulates the pressure
in the brain by governing the amount
and pressure of cerebrospinal fluid
passing through the catheter.
There are two main types of
hydrocephalus shunts: Fixed pressure
valve shunts and programmable valve
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shunts. Fixed pressure valve shunts
allow cerebrospinal fluid to pass
through the shunt only when the
pressure has exceeded some
predetermined setting, which medical
providers cannot adjust once implanted
without another surgery. The settings on
a programmable valve shunt system,
which is significantly more expensive,
can be adjusted non-invasively using
specially designed magnetic tools. An
insufficient number of customers are
likely to switch to programmable valve
shunts to prevent a small but significant
increase in the price of fixed pressure
valve shunt systems.
Integra, Codman, and Medtronic are
the only significant suppliers of fixed
pressure valve shunt systems.
Medtronic accounts for 55% of U.S.
sales, and Integra follows at 23% share
and Codman at 15% share. Aesculap
and Sophysa hold small, fringe
positions in the market and their
products are not close substitutes to
those of Integra and Codman.
V. Dural Grafts
Dural grafts are used to repair or
replace a patient’s dura mater, the thick
membrane that surrounds the brain and
spinal cord and keeps cerebrospinal
fluid in place. Integra leads the U.S.
market with 66% share of 2016 sales. In
addition, Integra manufactures
approximately 77% of the dural grafts
sold in the United States. Medtronic,
Codman, and Stryker account for 11%,
9%, and 8% of sales, respectively. Other
suppliers account for only a nominal
share of the market.
The Relevant Geographic Market
The United States is the relevant
geographic market in which to analyze
the effects of the proposed Acquisition.
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
cause substantial competitive harm in
the relevant markets. The parties are the
only significant suppliers of intracranial
pressure monitoring systems in the U.S.
market, and two of only three significant
suppliers of cerebrospinal fluid
collection systems, non-antimicrobial
external ventricular drainage catheters,
and fixed pressure valve shunt systems
in the United States. In the dural grafts
market, a combined Integra/Codman
would control the vast majority of the
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U.S. market and eliminate the close
competition that exists between the
parties today. Eliminating the head-tohead competition between Integra and
Codman in all of these highly
concentrated markets would allow the
combined firm to exercise market power
unilaterally, resulting in higher prices
and reduced choice for customers in
these markets.
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 to design and develop
an effective product, obtain FDA
approval, and develop clinical history
supporting the long-term efficacy of a
product. A new entrant must also
establish a sales and marketing
infrastructure, have or develop a track
record of service and support, and offer
a robust line of neurosurgical products
sufficient to convince potential
customers of the viability of its new
product offerings. 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 proposed Consent Agreement and
Order remedy the competitive concerns
raised by the proposed Acquisition by
requiring the parties to divest to Natus
all assets and rights to research,
develop, manufacture, market, and sell
Integra’s intracranial pressure
monitoring systems and fixed pressure
valve shunt systems, as well as
Codman’s cerebrospinal fluid collection
systems, non-antimicrobial external
ventricular drainage catheters, and dural
grafts. Integra is also required to divest
its San Diego, California facility that
manufactures a key component of its
intracranial pressure monitoring
systems. Additionally, to further ensure
the divestitures are successful, the
proposed Order requires the parties to
supply Natus with cranial access kits for
a limited time until Natus is able to
secure supply of that product
independently. The kit, which is often
sold with the divestiture assets,
includes items such as a hand drill,
forceps, and sutures used during cranial
surgery. The provisions of the Consent
Agreement ensure that Natus becomes
an independent, viable, and effective
competitor in the respective U.S.
markets in order to maintain the
competition that currently exists.
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Based in Pleasanton, California, Natus
is a global healthcare company that
provides screening, diagnostic, and
monitoring solutions for its three
business units: Neurology, newborn
care, and hearing and balance care. Its
neurology business includes systems
that are highly complementary to the
divestiture assets and test for a variety
of medical conditions, including
epilepsy, head injury, tumors,
Parkinson’s, and sleep apnea. Natus is
well positioned to restore the
competition that otherwise would have
been lost pursuant to the proposed
Acquisition.
The parties must accomplish the
divestitures and relinquish their rights
to Natus no later than ten days after
consummating the proposed
Acquisition. If the Commission
determines that Natus 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 Natus and
then divest the products to a
Commission-approved acquirer(s)
within six months of the date the Order
becomes final.
To ensure compliance with the Order,
the Commission has agreed to appoint a
Monitor to ensure that Integra and
Johnson & Johnson 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
Natus. 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. 2017–21291 Filed 10–3–17; 8:45 am]
BILLING CODE 6750–01–P
FEDERAL TRADE COMMISSION
sradovich on DSK3GMQ082PROD with NOTICES
[File No. 161 0084]
Abbott Laboratories and Alere Inc.;
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:
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20:18 Oct 03, 2017
Jkt 244001
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/commissionactions.
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
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46241
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.
E:\FR\FM\04OCN1.SGM
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Agencies
[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Notices]
[Pages 46238-46241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21291]
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FEDERAL TRADE COMMISSION
[File No. 171 0084]
Integra LifeSciences Holdings Corporation and Johnson & Johnson;
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 October 27, 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: ``Integra LifeSciences
et al.; FTC File No. 1710084'' on your comment, and file your comment
online at https://ftcpublic.commentworks.com/ftc/integradivest by
following the instructions on the web-based form. If you prefer to file
your comment on paper, write ``Integra LifeSciences et al.; FTC File
No. 1710084'' 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 27, 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 27,
2017. Write ``Integra LifeSciences et al.; FTC File No. 1710084'' 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/integradivest 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 ``Integra
LifeSciences et al.; FTC File No. 1710084'' 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
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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.
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 27, 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 Integra LifeSciences Holdings Corporation
(``Integra'') and Johnson & Johnson designed to remedy the
anticompetitive effects resulting from Integra's proposed purchase of
certain assets of Johnson & Johnson's Codman Neuro (``Codman'')
division. The proposed Decision and Order (``Order'') contained in the
Consent Agreement requires the parties to divest all rights and assets
to Natus Medical Incorporated (``Natus'') related to Integra's
intracranial pressure monitoring systems and fixed pressure valve shunt
systems, as well as Codman's cerebrospinal fluid collection systems,
non-antimicrobial external ventricular drainage catheters, and dural
grafts.
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 Asset Purchase Agreement signed on February
14, 2017, Integra will acquire Codman in a transaction valued at
approximately $1.0 billion (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
intracranial pressure monitoring systems, cerebrospinal fluid
collection systems, non-antimicrobial external ventricular drainage
catheters, fixed pressure valve shunt systems, and dural grafts. 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
Integra, headquartered in Plainsboro, New Jersey, is a medical
device company with worldwide operations and one of the largest
surgical instrument suppliers in the United States. The company has two
U.S. business units: Specialty Surgical Solutions and Orthopedics and
Tissue Technologies. The Specialty Surgical Solutions division offers
instruments and systems for, among other specialties, neurosurgery and
critical care.
Codman, part of Johnson & Johnson's DePuy Synthes Inc. business
unit, is a global medical device company that offers a diverse
portfolio of neurosurgery, neurovascular, and drug delivery products,
including instruments and systems for hydrocephalus management,
neurointensive care, and cranial surgery, as well as implantable drug
infusion systems. The proposed transaction excludes Codman's
neurovascular and drug delivery businesses.
The Relevant Products and Structure of the Markets
I. Intracranial Pressure Monitoring Systems
Intracranial pressure monitoring systems are used in intensive care
units and operating rooms to measure pressure inside the skull, which
can increase in the event of traumatic brain injury, hydrocephalus,
intracranial tumors, and other medical conditions. An increase in
intracranial pressure can severely damage the brain or spinal cord and
is a common cause of death in neurosurgical patients, making quick
detection of pressure buildup critical. Intracranial pressure
monitoring systems use a pressure-sensitive probe inserted through the
skull to send measurements via a transducer cable to a monitor at the
patient's bedside. Customers would not switch to an alternative product
in response to a small but significant increase in the price of
intracranial pressure monitoring systems.
Integra and Codman are the only significant suppliers in the U.S.
market for intracranial pressure monitoring systems, accounting for 68%
and 26% of 2016 sales, respectively. The remainder of the market is
comprised of small, fringe competitors that have limited competitive
significance.
II. Cerebrospinal Fluid Collection Systems
Cerebrospinal fluid collection systems drain excess cerebrospinal
fluid and monitor pressures within the fluid. They consist of a plastic
drainage bag, tubing, and other accessories that connect to a patient
through an external ventricular drainage catheter. There are no viable
alternatives to cerebrospinal fluid collection systems.
Integra, Codman, and Medtronic are the only competitively
significant suppliers of cerebrospinal fluid collection systems in the
United States. Integra is the leading supplier with 57%
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of the market. Medtronic accounts for an additional 27% of the market,
and Codman has a share of 14%. The next closest competitor is
M[ouml]ller Medical, which offers a more complex technology and only
accounts for a nominal share of the market.
III. Non-Antimicrobial External Ventricular Drainage Catheters
External ventricular drainage catheters funnel excess cerebrospinal
fluid from the brain to cerebrospinal fluid collection systems to
relieve intracranial pressure. External ventricular drainage catheters
are either antimicrobial or non-antimicrobial, and the two types
constitute distinct antitrust markets because of the substantial
differences between them. Non-antimicrobial external ventricular
drainage catheters lack an antibiotic coating and are suitable for less
critical patients; they also may be used to avoid the risk of
antibiotic interference when diagnosing infections. They are
significantly less expensive than antimicrobial external ventricular
drainage catheters. Customers would not switch from non-antimicrobial
external ventricular drainage catheters to the antimicrobial versions
or any other product in response to a 5% to 10% increase in the price
of non-antimicrobial external ventricular drainage catheters, in part
because even with such a price increase, antimicrobial external
ventricular drainage catheters would still be considerably more
expensive.
Integra and Codman account for 29% and 17% of the relevant market
in the United States. The only other competitively significant firm is
Medtronic, with a 51% share.
IV. Fixed Pressure Valve Shunt Systems
Shunts are the primary tool that neurosurgeons use to treat
hydrocephalus, or excessive accumulation of cerebrospinal fluid. Shunt
systems redirect excess cerebrospinal fluid from the brain or spinal
cord to another area of the body, usually the abdomen, for
reabsorption. Shunt systems consist of three components: A ventricular
catheter inserted into the brain, a valve to regulate the flow of the
fluid, and another catheter that is threaded to the location where the
fluid is emptied. Once implanted, the one-way valve in the shunt system
regulates the pressure in the brain by governing the amount and
pressure of cerebrospinal fluid passing through the catheter.
There are two main types of hydrocephalus shunts: Fixed pressure
valve shunts and programmable valve shunts. Fixed pressure valve shunts
allow cerebrospinal fluid to pass through the shunt only when the
pressure has exceeded some predetermined setting, which medical
providers cannot adjust once implanted without another surgery. The
settings on a programmable valve shunt system, which is significantly
more expensive, can be adjusted non-invasively using specially designed
magnetic tools. An insufficient number of customers are likely to
switch to programmable valve shunts to prevent a small but significant
increase in the price of fixed pressure valve shunt systems.
Integra, Codman, and Medtronic are the only significant suppliers
of fixed pressure valve shunt systems. Medtronic accounts for 55% of
U.S. sales, and Integra follows at 23% share and Codman at 15% share.
Aesculap and Sophysa hold small, fringe positions in the market and
their products are not close substitutes to those of Integra and
Codman.
V. Dural Grafts
Dural grafts are used to repair or replace a patient's dura mater,
the thick membrane that surrounds the brain and spinal cord and keeps
cerebrospinal fluid in place. Integra leads the U.S. market with 66%
share of 2016 sales. In addition, Integra manufactures approximately
77% of the dural grafts sold in the United States. Medtronic, Codman,
and Stryker account for 11%, 9%, and 8% of sales, respectively. Other
suppliers account for only a nominal share of the market.
The Relevant Geographic Market
The United States is the relevant geographic market in which to
analyze the effects of the proposed Acquisition. 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 cause substantial competitive harm
in the relevant markets. The parties are the only significant suppliers
of intracranial pressure monitoring systems in the U.S. market, and two
of only three significant suppliers of cerebrospinal fluid collection
systems, non-antimicrobial external ventricular drainage catheters, and
fixed pressure valve shunt systems in the United States. In the dural
grafts market, a combined Integra/Codman would control the vast
majority of the U.S. market and eliminate the close competition that
exists between the parties today. Eliminating the head-to-head
competition between Integra and Codman in all of these highly
concentrated markets would allow the combined firm to exercise market
power unilaterally, resulting in higher prices and reduced choice for
customers in these markets.
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 to design and
develop an effective product, obtain FDA approval, and develop clinical
history supporting the long-term efficacy of a product. A new entrant
must also establish a sales and marketing infrastructure, have or
develop a track record of service and support, and offer a robust line
of neurosurgical products sufficient to convince potential customers of
the viability of its new product offerings. 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 proposed Consent Agreement and Order remedy the competitive
concerns raised by the proposed Acquisition by requiring the parties to
divest to Natus all assets and rights to research, develop,
manufacture, market, and sell Integra's intracranial pressure
monitoring systems and fixed pressure valve shunt systems, as well as
Codman's cerebrospinal fluid collection systems, non-antimicrobial
external ventricular drainage catheters, and dural grafts. Integra is
also required to divest its San Diego, California facility that
manufactures a key component of its intracranial pressure monitoring
systems. Additionally, to further ensure the divestitures are
successful, the proposed Order requires the parties to supply Natus
with cranial access kits for a limited time until Natus is able to
secure supply of that product independently. The kit, which is often
sold with the divestiture assets, includes items such as a hand drill,
forceps, and sutures used during cranial surgery. The provisions of the
Consent Agreement ensure that Natus becomes an independent, viable, and
effective competitor in the respective U.S. markets in order to
maintain the competition that currently exists.
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Based in Pleasanton, California, Natus is a global healthcare
company that provides screening, diagnostic, and monitoring solutions
for its three business units: Neurology, newborn care, and hearing and
balance care. Its neurology business includes systems that are highly
complementary to the divestiture assets and test for a variety of
medical conditions, including epilepsy, head injury, tumors,
Parkinson's, and sleep apnea. Natus is well positioned to restore the
competition that otherwise would have been lost pursuant to the
proposed Acquisition.
The parties must accomplish the divestitures and relinquish their
rights to Natus no later than ten days after consummating the proposed
Acquisition. If the Commission determines that Natus 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 Natus and then divest the products to a Commission-
approved acquirer(s) within six months of the date the Order becomes
final.
To ensure compliance with the Order, the Commission has agreed to
appoint a Monitor to ensure that Integra and Johnson & Johnson 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 Natus. 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. 2017-21291 Filed 10-3-17; 8:45 am]
BILLING CODE 6750-01-P