[Federal Register Volume 80, Number 217 (Tuesday, November 10, 2015)]
[Notices]
[Pages 69675-69677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28522]


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FEDERAL TRADE COMMISSION

[File No. 151 0129]


Mylan N.V.; 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 draft 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 December 3, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/mylanperrigoconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Mylan N.V--Consent 
Agreement, File No. 151-0129'' on your comment and file your comment 
online at https://ftcpublic.commentworks.com/ftc/mylanperrigoconsent by 
following the instructions on the web-based form. If you prefer to file 
your comment on paper, write ``Mylan N.V.--Consent Agreement, File No. 
151-0129'' 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: Jasmine Rosner (202-326-3558), Bureau 
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent orders to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for November 3, 2015), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before December 3, 
2015. Write ``Mylan N.V.--Consent Agreement, File No. 151-0129'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/mylanperrigoconsent 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 ``Mylan N.V.--Consent 
Agreement, File No. 151-0129'' 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.
    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

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consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives on 
or before December 3, 2015. You can find more information, including 
routine uses permitted by the Privacy Act, in the Commission's privacy 
policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Mylan N.V. (``Mylan'') that is designed to remedy the 
anticompetitive effects resulting from Mylan's acquisition of Perrigo 
Company plc (``Perrigo''). Under the terms of the proposed Consent 
Agreement, Mylan is required to divest to Alvogen, Inc. (``Alvogen'') 
all of its rights and assets to the following generic pharmaceutical 
products: (1) Acyclovir ointment; (2) bromocriptine mesylate tablets; 
(3) clindamycin phosphate/benzoyl peroxide gel; (4) hydromorphone 
hydrochloride extended release tablets; (5) liothyronine sodium 
tablets; (6) polyethylene glycol 3350 over-the-counter (``OTC'') oral 
solution packets; and (7) scopolamine extended release transdermal 
patches.
    The proposed Consent Agreement has been placed on the public record 
for thirty days for receipt of comments from interested persons. 
Comments received during this period will become part of the public 
record. After thirty days, the Commission will again evaluate the 
proposed Consent Agreement, along with the comments received, to make a 
final decision as to whether it should withdraw from the proposed 
Consent Agreement or make final the Decision and Order (``Order'').
    On September 14, 2015, Mylan launched a hostile tender offer to 
gain a controlling interest in Perrigo. The Commission alleges in its 
Complaint 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 seven generic 
pharmaceutical markets in the United States. The proposed Consent 
Agreement will remedy the alleged violations by preserving the 
competition that otherwise would be eliminated by the proposed 
acquisition.

I. The Products and Structure of the Markets

    A generic pharmaceutical drug contains the same active ingredient 
as the brand name product, but typically at a much more affordable 
price. Pharmaceutical companies usually launch generic versions of 
drugs after a branded product loses its patent protection. When only 
one generic product is available, the price for the branded product 
typically acts as a ceiling above which the generic manufacturer cannot 
price its product. During this period, the branded product competes 
directly with the generic. Once multiple generic suppliers enter a 
market, the branded drug manufacturer usually ceases to provide any 
competitive constraint on the prices for generic versions of the drug. 
Rather, generic suppliers compete only against each other.
    Mylan's proposed acquisition of Perrigo will lessen competition in 
seven concentrated generic pharmaceutical product markets by reducing 
the number of current or future suppliers competing in each market. The 
proposed acquisition will reduce current competition in four generic 
pharmaceutical markets: (1) Bromocriptine mesylate tablets; (2) 
clindamycin phosphate/benzoyl peroxide gel; (3) liothyronine sodium 
tablets; and (4) polyethylene glycol 3350 OTC oral solution packets.
     Bromocriptine mesylate is a dopamine agonist used to treat 
Type 2 diabetes, pituitary tumors, Parkinson's disease, neuroleptic 
malignant syndrome, and hyperprolactinemia. The market for generic 2.5 
mg bromocriptine mesylate tablets is highly concentrated with only 
three current suppliers: Mylan, Perrigo, and Sandoz AG. Absent a 
remedy, the proposed transaction would consolidate the market from 
three to two suppliers.
     Clindamycin phosphate/benzoyl peroxide gel is a 
combination antibiotic and drying agent used to stop the bacterial 
infection that causes acne. Today, only Mylan supplies the market with 
generic clindamycin phosphate 1%/benzoyl peroxide 5% gel. Perrigo 
recently received FDA approval for generic clindamycin phosphate 1%/
benzoyl peroxide 5% gel and is poised to start supplying the market in 
the near future. As a result, the proposed transaction would reduce the 
number of generic clindamycin phosphate 1%/benzoyl peroxide 5% gel 
suppliers from two to one.
     Liothyronine sodium is a synthetic thyroid hormone used to 
treat hypothyroidism and to treat or prevent enlarged thyroid glands. 
Currently, only three suppliers provide generic liothyronine sodium 
tablets in the 0.005 mg, 0.025 mg, and 0.05 mg strengths: Mylan, 
Perrigo, and SigmaPharm Laboratories, LLC. The proposed transaction 
would further consolidate an already highly concentrated market, 
leaving two suppliers post-transaction.
     Polyethylene glycol 3350, a laxative, is an OTC oral 
solution packet used to treat occasional constipation. In the 17 gm/
packet OTC market, Mylan, Perrigo, and Gavis Pharmaceuticals, LLC, are 
the only active suppliers in the market. As a result, the proposed 
transaction would consolidate the number of active suppliers of generic 
polyethylene glycol 3350 OTC oral solution packets from three to two.
    Additionally, the proposed acquisition will reduce future 
competition in three generic pharmaceutical markets: (1) Acyclovir 
ointment; (2) hydromorphone hydrochloride extended release tablets; and 
(3) scopolamine extended release transdermal patches. In each of these 
markets, either Mylan or Perrigo is a likely new entrant in the near 
future. Without a remedy, the proposed acquisition would eliminate an 
independent entrant into each market, likely depriving customers of the 
significant cost savings that result when an additional generic 
supplier enters a concentrated market.
     Acyclovir ointment is a topical product used to slow the 
growth and spread of the herpes virus. Mylan and Amneal Pharmaceuticals 
LLC currently hold ANDAs and supply acyclovir 5% ointment. Allergan plc 
(``Allergan'') also sells an authorized generic version of acyclovir 5% 
ointment. Perrigo is one of a limited number of suppliers likely to 
enter this market in the near future.
     Hydromorphone hydrochloride is an analgesic used to treat 
moderate to severe pain in narcotic-tolerant patients. Perrigo and 
Allergan hold ANDAs for 8 mg, 12 mg, and 16 mg extended release 
tablets. In addition, Mallinckrodt plc markets an authorized generic 
version of hydromorphone hydrochloride extended release tablets. Mylan 
is one of a limited number of suppliers likely to enter this market in 
the near future.
     Scopolamine transdermal patches prevent nausea and 
vomiting associated with motion sickness and recovery from anesthesia 
and surgery. Novartis AG currently markets the branded version, 
Transderm Scop, which is available as a 1 mg/72 hour extended release 
transdermal patch. Perrigo holds the only approved ANDA for the generic 
version of Transderm Scop. Mylan is one of a limited number of other

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suppliers likely to enter this market in the near future. As there is 
no generic version of Transderm Scop on the market today, it is likely 
that the price for scopolamine transdermal patches would significantly 
decrease with the onset of generic competition. Without a remedy, the 
proposed acquisition would eliminate the price reductions that would 
likely have accompanied Mylan's independent entry into this market.

II. Entry

    Entry into each of these generic pharmaceutical markets would not 
be timely, likely, or sufficient in magnitude, character, and scope to 
deter or counteract the anticompetitive effects of the proposed 
acquisition. The combination of drug development times and regulatory 
requirements, including approval by the United States Food and Drug 
Administration (``FDA''), is costly and lengthy.

III. Effects

    The proposed acquisition likely would cause significant 
anticompetitive harm to consumers by eliminating current or future 
competition between Mylan and Perrigo in these seven concentrated 
markets. In each of these markets, Mylan and Perrigo are two of a 
limited number of current or likely future suppliers in the United 
States. Market participants characterize each of the markets as a 
current or likely future commodity market, in which the number of 
generic suppliers has a direct impact on pricing. Customers and 
competitors have observed that the price of generic pharmaceutical 
products decreases with new entry even after several suppliers have 
entered the market. Removal of an independent generic pharmaceutical 
supplier from the relevant markets in which Mylan and Perrigo currently 
compete likely would result in significantly higher prices post-
acquisition. Similarly, the elimination of a future independent 
competitor would prevent the price decreases that are likely to result 
from the firm's entry. Thus, absent a remedy, the proposed acquisition 
will likely cause U.S. consumers to pay significantly higher prices for 
these generic drugs.

IV. The Consent Agreement

    The proposed Consent Agreement effectively remedies the proposed 
acquisition's anticompetitive effects in each relevant market. Under 
the Consent Agreement, Mylan is required to divest to Alvogen its 
rights to the seven relevant products. Alvogen is an international 
pharmaceutical company, with commercial operations in thirty-four 
countries. Its business focuses on developing, manufacturing, and 
distributing generic, branded, and OTC pharmaceutical products. Mylan 
must accomplish the divestitures to Alvogen and relinquish its rights 
to these products no later than thirty days after the proposed 
acquisition is consummated.
    The Commission's goal in evaluating possible purchasers of divested 
assets is to maintain the competitive environment that existed prior to 
the proposed acquisition. If the Commission determines that Alvogen is 
not an acceptable acquirer, or that the manner of the divestitures is 
not acceptable, the proposed Order requires Mylan to unwind the sale of 
rights to Alvogen and to divest the products to a Commission-approved 
acquirer within six months of the date the Order becomes final. The 
proposed Order further allows the Commission to appoint a trustee if 
Mylan fails to divest the products as required.
    The proposed Consent Agreement contains several provisions to help 
ensure that the divestitures are successful. The Order requires Mylan 
to take all action to maintain the economic viability, marketability, 
and competitiveness of the products to be divested until such time that 
they are transferred to a Commission-approved acquirer. Mylan must 
provide transitional services to Alvogen to assist it in establishing 
independent manufacturing capabilities. These transitional services 
include technical assistance to manufacture the divestiture products in 
substantially the same manner and quality employed or achieved by 
Mylan, and advice and training from knowledgeable Mylan employees. 
Mylan must also provide Alvogen with a supply of the divested products 
while Mylan transfers manufacturing technology to Alvogen or its 
designated manufacturer. The goal of the transitional services is to 
ensure that Alvogen will be able to operate independent of Mylan in the 
manufacture and sale of the divested products. Nothing in the Consent 
Agreement, however, precludes Alvogen from sourcing active 
pharmaceutical ingredients or other divestiture product inputs from 
Mylan on a negotiated basis.
    As Alvogen was unable to perform due diligence on the Perrigo 
products at issue, Mylan divested its own on-market, generic acyclovir 
ointment product rather than Perrigo's product in development. Because 
the competition that is preserved by the proposed Consent Agreement 
will only occur when the Perrigo product is launched, the proposed 
Order permits Mylan to retain the right to sell acyclovir ointment 
through a license from Alvogen until thirty days after Mylan receives 
approval for the Perrigo ANDA, but for no longer than three years. This 
provision is designed to permit Mylan to remain an active market 
participant pending the approval of Perrigo's acyclovir ointment ANDA 
but also ensures Mylan's continued incentive to develop and launch the 
Perrigo product.
    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. 2015-28522 Filed 11-9-15; 8:45 am]
 BILLING CODE 6750-01-P