[Federal Register Volume 60, Number 3 (Thursday, January 5, 1995)]
[Notices]
[Pages 1782-1784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-250]



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FEDERAL TRADE COMMISSION

[File No. 951 0001]


IVAX Corporation; Proposed Consent Agreement With Analysis To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
permit, among other things, IVAX, a Florida corporation, to acquire 
Zenith Laboratories, except for Zenith's rights to market or sell 
extended release generic verapamil under Zenith's exclusive 
distribution agreement with G.D. Searle & Co. The consent agreement 
also would require IVAX, for ten years, to obtain Commission approval 
before acquiring any stock in any entity that manufactures, or is an 
[[Page 1783]] exclusive distributor for another manufacturer of, 
extended release generic verapamil in the United States.

DATES: Comments must be received on or before March 6, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Ann Malester, FTC/S-2224, Washington, DC 20580. (202) 326-2682.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the following 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 sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

    In the Matter of: IVAX Corporation, a corporation.

[File No. 951-0001]

Agreement Containing Consent Order

    The Federal Trade Commission (``Commission''), having initiated an 
investigation of the proposed acquisition by IVAX Corporation 
(``IVAX'') of all of the voting securities of Zenith Laboratories, Inc. 
(``Zenith''), and it now appearing that IVAX, hereinafter sometimes 
referred to as ``proposed respondent,'' is willing to enter into an 
agreement containing an order to cease and desist from making certain 
acquisitions, and providing for other relief:
    It is hereby agreed by and between IVAX, by its duly authorized 
officer and its attorney, and counsel for the Commission that:
    1. Proposed respondent IVAX is a corporation organized, existing, 
and doing business under and by virtue of the laws of Florida, with its 
offices and principal place of business located at 8800 Northwest 36th 
Street, Miami, Florida 33178-2404.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint.
    3. Proposed respondent waives:
    a. any further procedural steps;
    b. the requirements that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    c. all rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    d. any claim under the Equal Access to Justice Act.
    4. This agreement shall not become part of the public record of the 
proceedings unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the proposed respondent, in which event 
it will take such action as it may consider appropriate, or issue and 
serve its complaint (in such form as the circumstances may require) and 
decision, in disposition of the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent that the law has been 
violated as alleged in the draft of complaint, or that the facts as 
alleged in the draft complaint, other than jurisdictional facts, are 
true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to 
proposed respondent, (1) issue its complaint corresponding in form and 
substance with the draft of complaint and its decision containing the 
following order in disposition of the proceeding, and (2) make 
information public with respect thereto. When so entered, the order 
shall have the same force and effect and may be altered, modified, or 
set aside in the same manner and within the same time provided by 
statute for other orders. The order shall become final upon service. 
Delivery by the United States Postal Service of the complaint and 
decision containing the agreed-to order to proposed respondent's 
address as stated in this agreement shall constitute service. Proposed 
respondent waives any right it may have to any other manner of service. 
The complaint may be used in construing the terms of the order, and no 
agreement, understanding, representation, or interpretation not 
contained in the order or the agreement may be used to vary or 
contradict the terms of the order.
    7. Proposed respondent has read the proposed complaint and order 
contemplated hereby. Proposed respondent understands that once the 
order has been issued, it will be required to file one or more 
compliance reports showing that it has fully complied with the order. 
Proposed respondent further understands that it may be liable for civil 
penalties in the amount provided by law for each violation of the order 
after it becomes final.

Order

I

    It is ordered That, as used in this order, the following 
definitions shall apply:
    A. ``Respondent'' or ``IVAX'' means IVAX Corporation, its 
subsidiaries, divisions, and groups and affiliates controlled by IVAX 
Corporation, their directors, officers, employees, agents, and 
representatives, and their successors and assigns.
    B. ``Zenith'' means Zenith Laboratories, Inc., its subsidiaries, 
divisions, and groups and affiliates controlled by Zenith, their 
directors, officers, employees, agents, and representatives, and their 
successors and assigns.
    C. ``Commission'' means the Federal Trade Commission.
    D. ``Acquisition'' means the acquisition of all voting securities 
of Zenith by IVAX.
    E. ``FDA'' means the United States Food & Drug Administration.
    F. ``Isoptin SR'' means the sustained-release form of Verapamil 
hydrochloride for which Knoll Pharmaceutical Company holds an approved 
New Drug Application.
    G. ``Verapamil HC1'' means any pharmaceutical drug receiving the 
therapeutic equivalence evaluation code ``AB'' by the FDA, which 
designates such product as being therapeutically equivalent to Isoptin 
SR.
    H. ``Searle Distribution Agreement'' means the agreement, dated 
March 7, 1994, between G.D. Searle & Co. (``Searle'') and Zenith, 
pursuant to which Zenith is appointed the exclusive distributor of 
Verapamil HC1 for Searle.

II

    It is further ordered That respondent shall not acquire, or 
otherwise obtain, any rights to market or sell Verapamil HC1 pursuant 
to the Searle Distribution Agreement.

III

    It is further ordered That, for a period of ten (10) years from the 
date this order becomes final, respondent shall not, 
[[Page 1784]] without the prior approval of the Commission, directly or 
indirectly, through subsidiaries, partnerships, or otherwise:
    A. Acquire any stock, share capital, equity or other interest in 
any concern, corporate or non-corporate, engaged at the time of such 
acquisition in, or within the two (2) years preceding such acquisition 
engaged in, the manufacture of Verapamil HC1 in the United States, or 
any concern that is an exclusive distributor of Verapamil HC1 in the 
United States for a manufacturer of Verapamil HC1, provided, however, 
that each pension, benefit, or welfare plan or trust controlled by 
respondent may acquire, for investment purposes only, an interest of 
not more than two (2) percent of the stock or share capital of such 
person or concern, and further provided, however, that an acquisition 
will be exempt from the requirements of this Paragraph III.A. if it is 
solely for the purposes of investment and respondent will hold 
cumulatively no more than two (2) percent of the shares of any class of 
security;
    B. Acquire any assets used in or previously used in (and still 
suitable for use in) the manufacture of Verapamil HC1 in the United 
States; provided however, that this Paragraph III.B. shall not apply to 
any acquisition of goods, services, or equipment in the ordinary course 
of business;
    C. Enter into any agreement with a manufacturer of Verapamil HC1 
granting respondent the exclusive right to distribute such 
manufacturer's Verapamil HC1 for resale.

IV

    It is further ordered That one year (1) from the date this order 
becomes final, annually for the next nine (9) years on the anniversary 
of the date this order becomes final, and at such other times as the 
Commission may require, respondent shall file a verified written report 
setting forth in detail the manner and form in which it has complied 
and is complying with this order.

V

    It is further ordered That respondent shall notify the Commission 
at least thirty (30) days prior to any proposed change in the corporate 
respondent such as dissolution, assignment, sale resulting in the 
emergence of a successor corporation, or the creation or dissolution of 
subsidiaries or any other change in the corporation that may affect 
compliance obligations arising out of the order.

VI

    It is further ordered That, for the purpose of determining or 
securing compliance with this order, subject to any legally recognized 
privilege and upon written request with reasonable notice, respondent 
shall permit any duly authorized representatives of the Commission:
    A. Access, during office hours and in the presence of counsel, to 
inspect and copy all books, ledgers, accounts, correspondence, 
memoranda and other records and documents in the possession or under 
the control of respondent relating to any matters contained in this 
order; and
    B. Upon five (5) days' notice to respondent and without restraint 
or interference from it, to interview officers, directors, or employees 
of respondent, who may have counsel present regarding such matters.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing a proposed Consent Order 
from IVAX Corporation (``IVAX''), which prohibits IVAX from acquiring 
any rights to market or sell generic verapamil hydrochloride in the 
extended release form (``generic verapamil'') pursuant to Zenith 
Laboratories' exclusive distribution agreement with G.D. Searle & Co. 
(``Searle'').
    The proposed Consent Order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
Order.
    On August 26, 1994, IVAX and Zenith Laboratories, Inc., 
(``Zenith'') entered into an agreement whereby IVAX agreed to acquire 
all of the voting securities of Zenith in a share exchange valued at 
$593 million. The proposed complaint alleges that the proposed 
acquisition, if consummated, would constitute a violation of Section 7 
of the Clayton Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of the 
FTC Act, as amended, 15 U.S.C. Sec. 45, in the market for the sale of 
generic verapamil in the United States. IVAX is the only company with 
an approved Abbreviated New Drug Application (``ANDA'') to manufacture 
and sell generic verapamil in the United States, and Zenith has 
exclusive rights to market and sell generic verapamil for Searle, a 
company that manufactures a branded equivalent of the generic drug.
    The proposed Consent Order would remedy the alleged violation by 
prohibiting IVAX from acquiring Zenith's rights to market or sell 
generic verapamil pursuant to the exclusive distribution agreement 
between Zenith and Searle. In an effort to address antitrust concerns, 
Zenith and Searle had terminated the exclusive distribution agreement 
on November 28, 1994, and agreement that Zenith would transfer its 
generic verapamil customers to Searle or Searle's designee, which would 
continue to sell generic verapamil. As a result, two independent 
competitors will remain in the market following the proposed 
acquisition. The proposed Consent Order ensures that IVAX will not be 
able to renegotiate an exclusive arrangement with Searle after it 
acquires Zenith.
    Under the provisions of the Consent Order, IVAX is also required to 
provide to the Commission a report of its compliance with the 
provisions of the Order one (1) year from the date the Order becomes 
final, and annually thereafter for nine (9) years.
    The proposed Order will prohibit IVAX, for a period of ten (10) 
years, from acquiring, without Federal Trade Commission approval, any 
stock in any concern engaged in the manufacture of generic verapamil or 
in any concern that is an exclusive distributor in the United States 
for another manufacturer of generic verapamil, or any assets used in 
the manufacture of generic verapamil in the United States, unless they 
are acquired in the ordinary course of business. In addition, the 
Proposed Order requires IVAX to seek prior Commission approval before 
entering into any exclusive agreement to distribute another 
manufacturer's generic verapamil. The Consent Order also requires IVAX 
to notify the Commission at least thirty (30) days prior to any change 
in the structure of IVAX resulting in the emergence of a successor.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order, and it is not intended to constitute an official 
interpretation of the agreement and proposed Order or to modify in any 
way their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 95-250 Filed 1-4-95; 8:45 am]
BILLING CODE 6750-01-M