[Federal Register Volume 77, Number 204 (Monday, October 22, 2012)]
[Notices]
[Pages 64515-64519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25957]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 121-0132]


Watson Pharmaceuticals, Inc., Actavis Inc., Actavis Pharma 
Holding 4 ehf., and Actavis S.a.r.l.; Analysis of Agreement Containing 
Consent Orders 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 or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before November 14, 2012.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/watsonactavisconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Watson Actavis, File 
No. 121 0132'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/watsonactavisconsent, by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Lisa De Marchi Sleigh (202-326-2535), 
FTC, 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 October 15, 2012), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained 
from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue 
NW., Washington, DC 20580, either in person or by calling (202) 326-
2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 14, 
2012. Write ``Watson Actavis, File No. 121 0132'' 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

[[Page 64516]]

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.
---------------------------------------------------------------------------

    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/watsonactavisconsent 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 ``Watson Actavis, File No. 
121 0132'' on your comment and on the envelope, and mail or deliver it 
to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., 
Washington, DC 20580. 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 November 14, 2012. 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 Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Watson Pharmaceuticals, Inc. (``Watson'') and Actavis 
Inc., Actavis Pharma Holding 4 ehf., and Actavis S.[agrave].r.l. 
(together, ``Actavis'') that is designed to remedy the anticompetitive 
effects in twenty-one pharmaceutical markets resulting from Watson's 
acquisition of Actavis. Under the terms of the proposed Consent 
Agreement, the companies would be required to divest to Par 
Pharmaceutical, Inc. (``Par'') all of Watson's rights and assets 
relating to (1) generic adapalene and benzoyl peroxide topical gel; (2) 
generic extended release morphine sulfate capsules; (3) generic 
extended release oxymorphone non-tamper resistant tablets; and (4) 
generic extended release amphetamine salts capsules; as well as all of 
Actavis's rights and assets relating to the following generic products: 
(1) Extended release diltiazem hydrochloride capsules (generic Cardizem 
CD); (2) fentanyl transdermal system; (3) extended release glipizide 
tablets; (4) extended release methylphenidate hydrochloride tablets; 
(5) ursodiol tablets; (6) metoclopramide hydrochloride tablets; (7) 
extended release oxycodone tamper resistant tablets; (8) extended 
release nifedipine tablets; (9) extended release rivastigmine film; and 
(10) varenicline tartrate tablets. The companies would also be required 
to divest to Sandoz International GmbH (``Sandoz''), a subsidiary of 
Novartis AG (``Novartis''), all of Watson's rights and assets relating 
to generic dextromethorphan hydrobromide and quinidine sulfate 
capsules, as well as all of Actavis's rights and assets to (1) generic 
extended release bupropion hydrochloride tablets; (2) generic extended 
release diltiazem hydrochloride capsules (generic Tiazac); and (3) 
generic lorazepam tablets. The companies would also be required to 
waive all of Actavis's rights in generic isradipine capsules and 
generic loxapine succinate capsules. In addition, the proposed Consent 
Agreement requires Watson to amend a Development and Manufacturing 
Agreement with Pfizer, Inc. (``Pfizer'') relating to the manufacture of 
extended release morphine sulfate and naltrexone combination capsules.
    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 again review the proposed 
Consent Agreement and the comments received and will decide whether it 
should withdraw from the proposed Consent Agreement, modify it, or make 
final the Decision and Order (``Order'').
    Pursuant to a Sale and Purchase Agreement dated as of April 25, 
2012, Watson proposes to acquire Actavis in a transaction valued at 
approximately $5.9 billion (``Proposed 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 lessening current and future competition in U.S. markets for the 
following generic pharmaceutical products: (1) Extended release 
bupropion hydrochloride tablets; (2) extended release diltiazem 
hydrochloride capsules (generic Cardizem CD); (3) fentanyl transdermal 
system; (4) lorazepam tablets; (5) metoclopramide hydrochloride 
tablets; (6) extended release morphine sulfate capsules; (7) extended 
release nifedipine tablets; (8) extended release amphetamine salts 
capsules; (9) extended release diltiazem hydrochloride capsules 
(generic Tiazac); (10) extended release oxymorphone non-tamper 
resistant tablets; (11) extended release glipizide tablets; (12) 
isradipine capsules; (13) loxapine succinate capsules; (14) extended 
release methylphenidate hydrochloride tablets; (15) ursodiol tablets; 
(16) adapalene and benzoyl peroxide topical gel; (17) dextromethorphan 
hydrobromide and quinidine sulfate capsules; (18) extended release 
morphine sulfate and naltrexone combination capsules; (19) extended 
release oxycodone tamper resistant tablets; (20) extended release 
rivastigmine film; and (21) varenicline tartrate tablets (collectively, 
the ``Products''). The proposed Consent Agreement will remedy the 
alleged violations by replacing the competition that would otherwise be 
eliminated by the acquisition.

[[Page 64517]]

The Products and Structure of the Markets

    The Proposed Acquisition would reduce the number of suppliers in 
each of the relevant markets. In human pharmaceutical product markets 
with generic competition, price generally decreases as the number of 
generic competitors increases. Accordingly, the reduction in the number 
of suppliers within each relevant market has a direct and substantial 
effect on pricing.
    The Proposed Acquisition would reduce current competition in the 
markets for each of the following generic products: (1) Extended 
release bupropion hydrochloride tablets; (2) extended release diltiazem 
hydrochloride capsules (generic Cardizem CD); (3) fentanyl transdermal 
system; (4) lorazepam tablets; (5) metoclopramide hydrochloride 
tablets; (6) extended release morphine sulfate capsules; and (7) 
extended release nifedipine tablets. The structure of these markets is 
as follows:
     Extended release bupropion hydrochloride tablets, the 
generic of Zyban by GlaxoSmithKline plc, are designed to help people 
quit smoking by reducing cravings and other side effects of withdrawal. 
Currently, four firms market generic Zyban B Watson, Actavis, Teva 
Pharmaceutical Industries Ltd. (``Teva''), and Mylan, Inc. (``Mylan''). 
Thus, the Proposed Acquisition would reduce the number of competitors 
for generic Zyban from four to three and result in a 45% market share 
for the combined entity based on 2011 sales. Teva and Mylan had 2011 
shares of 53% and 2%, respectively.
     Extended release diltiazem hydrochloride capsules (generic 
Cardizem CD) are used to treat hypertension, angina, and certain heart 
rhythm disorders. Currently, four firms market generic Cardizem CD B 
Watson, Actavis, Teva and Sun Pharmaceutical Industries, Ltd. 
(``Sun''), which entered in late 2011. Thus, the Proposed Acquisition 
would reduce the number of competitors for generic Cardizem CD from 
four to three and result in a 55% market share for the combined entity.
     Fentanyl transdermal system is a patch that releases 
fentanyl to ease chronic pain and is the generic equivalent of Janssen 
Pharmaceuticals, Inc.'s (``Janssen's'') branded product, Duragesic. 
Currently, five firms market generic fentanyl transdermal system B 
Watson, Actavis, Mylan, Apotex, Inc., and Mallinckrodt, LLC (a division 
of Covidien plc). Thus, the Proposed Acquisition would reduce the 
number of competitors for generic Duragesic from five to four and give 
the combined entity a market share of 34%. Mylan is the market leader 
with 51% and the remaining two suppliers combined had slightly more 
than a 10% share.
     Lorazepam, the generic of Ativan by Valeant 
Pharmaceuticals International, Inc. (``Valeant''), is used to treat 
anxiety disorders. Currently, five firms market generic lorazepam--
Watson, Actavis, Excellium Pharmaceutical, Ltd. (``Excellium''), Mylan, 
and Ranbaxy Laboratories, Ltd. (``Ranbaxy''). The proposed transaction 
would reduce the number of competitors for lorazepam from five to four 
and result in a market share for the combined entity of 53%. Mylan and 
Ranbaxy had 21% and 16% market shares, respectively, while Excellium 
had a 1% market share. The remainder of the market is split by 
repackagers of these competitors' product.
     Metoclopramide hydrochloride is the generic version of 
Reglan, which is used to treat nausea and is marketed by Ani 
Pharmaceuticals, Inc. In 2011, Watson, Actavis, and Teva shared 
approximately 61% of sales. While other suppliers have U.S. Food and 
Drug Administration (``FDA'') approval to market the drug, they have 
been exiting the market over the last several years for a variety of 
reasons, including product liability issues associated with the branded 
product. Accounting for recent exit, the proposed transaction would 
reduce the number of competitively significant suppliers of 
metoclopramide hydrochloride from three to two and give the combined 
entity a 34% market share.
     Extended release morphine sulfate capsules are the generic 
equivalent of Actavis's Kadian, which is used to treat acute pain. In 
addition to owning the branded Kadian product, Actavis also markets an 
authorized generic version of Kadian. Watson markets the only other 
generic Kadian available. Thus, absent a remedy, the proposed 
transaction would create a monopoly in generic extended release 
morphine sulfate capsules.
     Extended release nifedipine tablets are the generic 
version of Adalat CC, which is marketed by Bayer AG, and used to treat 
hypertension and angina. Currently, there are four suppliers of 
extended release nifedipine tablets in the United States--Watson, 
Actavis, Mylan, and Valeant, whose product is sold by Teva. Thus, the 
proposed transaction would reduce the number of suppliers of extended 
release nifedipine tablets from four to three and result in a combined 
entity with 31% market share.
    In addition to reducing current competition in the seven above-
identified markets, the Proposed Acquisition would significantly reduce 
competition in the markets for each of the following generic products: 
(1) Extended release amphetamine salts capsules; (2) extended release 
diltiazem hydrochloride capsules (generic Tiazac); (3) extended release 
oxymorphone non-tamper resistant tablets; (4) extended release 
glipizide tablets; (5) isradipine capsules; (6) loxapine succinate 
capsules; (7) extended release methylphenidate hydrochloride tablets; 
and (8) ursodiol tablets. Either Watson or Actavis currently markets 
each of these products, and the other is likely to enter, significantly 
increasing competition and likely causing price reductions when entry 
occurs. The structure of each of these markets is as follows:
     Extended release amphetamine salts capsules are the 
generic version of Adderall XR, manufactured by Shire plc, which is a 
treatment for attention deficit hyperactivity disorder (``ADHD''). 
Actavis recently entered this market, joining Teva and Impax 
Laboratories, Inc., who are marketing authorized generics. Watson is 
one of a limited number of firms that has an extended release 
amphetamine salts capsule in development. The proposed transaction 
would eliminate a likely potential supplier in the concentrated market 
for generic Adderall XR.
     Extended release diltiazem hydrochloride capsules (generic 
Tiazac) are used to treat hypertension and angina. Three companies 
currently market generic Tiazac--Sun, Inwood Laboratories (a wholly-
owned subsidiary of Forest Pharmaceuticals, Inc.), and Watson. Actavis 
is one of a limited number of firms that has a generic extended release 
diltiazem hydrochloride capsule in development. The proposed 
transaction would eliminate a likely potential supplier in the 
concentrated market for generic Tiazac.
     Extended release oxymorphone non-tamper resistant tablets 
are the generic version of Opana ER, which is used to treat chronic 
pain. Opana ER is marketed by Endo Health Solutions, Inc. Actavis 
markets the only generic version of Opana ER in two strengths and is 
developing additional strengths. Watson is also one of a limited number 
of firms developing this product. The proposed transaction would 
eliminate a likely potential supplier in the concentrated market for 
generic Opana ER.
     Extended release glipizide is an oral diabetes medicine 
that boosts insulin production to control blood sugar levels. Watson's 
product and Pfizer, Inc.'s (``Pfizer's'') authorized generic are the 
only generic versions of the product

[[Page 64518]]

currently available. Actavis is one of a limited number of firms that 
has extended release glipizide in development and the proposed 
transaction would eliminate a likely potential supplier in the 
concentrated market for extended release glipizide.
     Isradipine capsules are used to treat high blood pressure 
and are the generic version of Dynacirc. Branded Dynacirc has been 
discontinued and Watson manufactures the only generic product available 
today. Actavis has a marketing and profit-sharing arrangement with the 
best-positioned entrant, which is a likely potential supplier in the 
concentrated market for isradipine capsules.
     Loxapine capsules are used to treat the symptoms of 
schizophrenia and are the generic version of branded Loxatine, which is 
no longer on the market. Watson manufactures the only generic product 
available today. Actavis has a profit-sharing arrangement with a best-
positioned entrant for this product, which is a likely potential 
supplier in the concentrated market for generic Loxatine.
     Extended release methylphenidate hydrochloride tablets are 
the generic equivalent of Concerta, which is manufactured by Janssen 
and used in the treatment of ADHD in people over the age of six. Watson 
markets the only generic product as the authorized generic and Actavis 
is one of a limited number of firms that has an extended release 
methylphenidate hydrochloride tablet in development. The proposed 
transaction would eliminate a likely potential supplier in the 
concentrated market for extended release methylphenidate hydrochloride 
tablets.
     Depending on the strength, generic ursodiol tablets are 
the generic version of Urso 250 or Urso Forte and are used to treat 
primary biliary cirrhosis. Watson currently markets both strengths of 
generic ursodiol and Actavis is one of a limited number of likely 
potential suppliers of each of these strengths of ursodiol tablets. The 
proposed transaction would eliminate a likely potential supplier in the 
concentrated market for ursodiol tablets for a significant period of 
time.
    The transaction will also reduce future competition in generic 
markets that do not yet exist, but will be highly concentrated when 
Watson and Actavis enter. These markets include: (1) Adapalene and 
benzoyl peroxide topical gel; (2) dextromethorphan hydrobromide and 
quinidine sulfate capsules; (3) extended release morphine sulfate and 
naltrexone combination capsules; (4) extended release oxycodone tamper 
resistant tablets; (5) extended release rivastigmine film; and (6) 
varenicline tartrate tablets. The structure of each of these markets is 
as follows:
     The combination of adapalene and benzoyl peroxide is a 
topical treatment for acne. It is marketed by Galderma Laboratories 
L.P. under the brand Epiduo. Currently, there are no AB-rated generic 
versions of Epiduo available in the United States, but Watson and 
Actavis are two of a limited number of likely potential suppliers of 
generic Epiduo. The proposed transaction would eliminate a likely 
entrant into what will be a concentrated market for generic Epiduo.
     Dextromethorphan hydrobromide and quinidine sulfate 
capsules are the generic version of Nuedexta and are used to treat 
pseudobulbar affect, i.e., uncontrolled episodes of crying and/or 
laughing in people with multiple sclerosis and other neurological 
diseases. Currently, there are no generic versions of Nuedexta 
available in the United States. Watson and Actavis are two of a limited 
number of likely potential suppliers of generic Nuedexta. The proposed 
transaction would eliminate a likely entrant into what will be a 
concentrated market for generic Nuedexta.
     Extended release morphine sulfate and naltrexone 
combination capsules are the generic equivalent of Pfizer's Embeda, a 
product used to treat acute pain. Currently, there are no generic 
versions of Embeda available in the United States. Pfizer recalled the 
branded product, but plans to return it to market in the near future. 
Actavis and Pfizer have entered into an exclusive Development and 
Manufacturing Agreement to manufacture Embeda, and that agreement 
grants Actavis competitively significant rights (including authorized 
generic marketing rights). Watson is one of a limited number of likely 
potential suppliers of generic Embeda. The proposed transaction would 
eliminate a likely entrant into what will be a concentrated market for 
generic Embeda.
     Extended release oxycodone tamper resistant tablets are 
the generic version of tamper resistant OxyContin, which is used to 
treat moderate to severe pain that is expected to last for an extended 
period of time. No generic versions of this product are yet available 
in the United States. Watson and Actavis are among a limited number of 
likely potential suppliers of generic OxyContin. The proposed 
transaction would eliminate a likely entrant into what will be a 
concentrated market for generic OxyContin.
     Extended release rivastigmine film is the generic 
equivalent of Exelon, a patch used to treat Alzheimer's disease and 
dementia resulting from Parkinson's disease. Novartis markets branded 
Exelon in the United States. Currently, there are no generic versions 
of this product in the United States. Watson and Actavis are among a 
limited number of likely potential suppliers of generic Exelon. The 
proposed transaction would eliminate a likely entrant into what will be 
a concentrated market for generic Exelon.
     Varenicline tartrate tablets are the generic version of 
Pfizer's Chantix, which is a smoking cessation medicine. Currently, no 
generic versions of this product are available in the United States. 
Watson and Actavis are among a limited number of likely potential 
suppliers of generic Chantix. The proposed transaction would eliminate 
a likely entrant into what will be a concentrated market for generic 
Chantix.

Entry

    Entry into the markets for the Products would not be timely, 
likely, or sufficient in magnitude, character, and scope to deter or 
counteract the anticompetitive effects of the acquisition. The 
combination of drug development times and regulatory requirements, 
including FDA approval, takes well in excess of two years. And even 
companies for whom the FDA approval process is well underway face other 
regulatory barriers, including Hatch-Waxman regulatory exclusivity and 
pending patent litigation, that limit their ability to enter these 
markets in a timely manner.

Effects

    The Proposed Acquisition would cause significant anticompetitive 
harm to consumers in the U.S. markets for the Products, either by 
eliminating significant current or potential competition in 
concentrated existing markets, or by eliminating significant potential 
competition among a limited number of competitors in future markets. In 
pharmaceutical markets with generic competition, price generally 
decreases as the second, third, fourth, and frequently fifth 
competitors enter. Although in certain of the markets, neither Watson 
nor Actavis yet have a marketed product, and in other of the markets, 
all generic products have yet to be approved, the FDA approval process 
provides extensive information about the timeliness and likeliness of 
entry by firms that market generic pharmaceuticals. In addition, 
substantial experience and empirical

[[Page 64519]]

evidence of the impact of multiple generic suppliers on prices for 
other drugs demonstrate that the likely effects of the Proposed 
Acquisition in the markets for these products would be substantial. The 
Proposed Acquisition, by reducing an already limited number of 
competitors or likely potential competitors in each of these markets, 
would cause anticompetitive harm to U.S. consumers by increasing the 
likelihood of higher post-acquisition prices.

The Consent Agreement

    The proposed Consent Agreement effectively remedies the Proposed 
Acquisition's anticompetitive effects in the relevant markets. Pursuant 
to the Consent Agreement, Watson and Actavis are required to divest 
either Watson's or Actavis's rights and assets related to eighteen of 
the twenty-one Products (all but extended release morphine sulfate and 
naltrexone combination capsules, isradipine capsules, and loxapine 
succinate capsules) to a Commission-approved acquirer no later than ten 
days after the acquisition. To remedy the concerns with the three 
remaining products, the combined entity would also be required to amend 
Actavis's existing Development and Manufacturing Agreement with Pfizer 
to eliminate Actavis' right of first refusal to market a potential 
authorized generic, to allow the relationship to end, and to transfer 
manufacturing rights back to Pfizer. In addition, the companies are 
required to waive Actavis's rights related to isradipine capsules and 
loxapine succinate capsules.
    The proposed Consent Agreement requires Watson or Actavis to divest 
assets related to four of the markets (generic extended release 
bupropion hydrochloride tablets, generic extended release diltiazem 
hydrochloride capsules, generic lorazepam tablets, and generic 
dextromethorphan hydrobromide and quinidine sulfate capsules) to 
Sandoz, and the rest of the Products (all but extended release morphine 
sulfate and naltrexone combination capsules, isradipine capsules, and 
loxapine succinate capsules) to Par. Par is a New Jersey-based generic 
pharmaceutical company selling over 60 prescription drug product 
families and has an active product development pipeline. Sandoz is 
based in Germany and has approximately 200 generic product families in 
the United States and an active product development pipeline. With 
their experience in generic markets, Par and Sandoz are expected to 
replicate the competition that would otherwise be lost with the 
Proposed Acquisition. Further, the amended supply agreement with Pfizer 
concerning Embeda will ensure that Pfizer's plans to re-launch Embeda 
and the ensuing generic competition for that product will remain intact 
after the Proposed Acquisition. The renouncements of the combined 
entity's interest in the isradipine and loxapine succinate agreements 
will similarly preserve competition in each of those markets.
    The Commission's goal in evaluating possible purchasers of divested 
assets is to maintain the competitive environment that existed prior to 
the acquisition. If the Commission determines that Par and/or Sandoz 
are not acceptable acquirers of the assets to be divested, or that the 
manner of the divestitures is not acceptable, the parties must unwind 
the sale to Par and/or Sandoz 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 several provisions to help 
ensure that the divestitures are successful. The Order requires Watson 
and Actavis to take all action to maintain the economic viability, 
marketability, and competitiveness of the products to be divested until 
such time as they are transferred to a Commission-approved acquirer. 
Watson and Actavis must transfer the manufacturing technology for 
generic (1) adapalene and benzoyl peroxide topical gel; (2) extended 
release morphine sulfate capsules; (3) generic extended release 
oxymorphone non-tamper resistant tablets; (4) extended release 
amphetamine salts capsules; (5) extended release diltiazem 
hydrochloride capsules (generic Cardizem CD); (6) fentanyl transdermal 
system; (7) extended release glipizide tablets; (8) extended release 
methylphenidate hydrochloride tablets; (9) ursodiol tablets; (10) 
metoclopramide hydrochloride tablets; (11) extended release oxycodone 
tamper resistant tablets; (12) extended release nifedipine tablets; 
(13) extended release rivastigmine film; and (14) varenicline tartrate 
tablets to Par and must supply Par with extended release morphine 
sulphate capsules, extended release nifedipine tablets, ursodiol 
tablets, extended release glipizide tablets, metoclopramide 
hydrochloride tablets, and extended release diltiazem hydrochloride 
capsules (generic Cardizem CD). Watson and Actavis must also transfer 
to Sandoz the manufacturing technology for generic (1) dextromethorphan 
hydrobromide and quinidine sulfate capsules; (2) extended release 
bupropion hydrochloride tablets; (3) extended release diltiazem 
hydrochloride capsules (generic Tiazac); and (4) lorazepam tablets and 
must supply Sandoz with extended release diltiazem hydrochloride 
capsules (generic Tiazac) and lorazepam tablets during the transition 
period.
    The purpose of this analysis is to facilitate public comment on the 
proposed Consent Agreement, and it is not intended to constitute an 
official interpretation of the proposed Order or to modify its terms in 
any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2012-25957 Filed 10-19-12; 8:45 am]
BILLING CODE 6750-01-P