[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Notices]
[Pages 9469-9472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04039]


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FEDERAL TRADE COMMISSION

[File No. 151-0044]


Hikma Pharmaceuticals PLC and C.H. Boehringer Sohn AG & Co. KG; 
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 order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before March 22, 2016.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/hikmabenconsent 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 Hikma 
Pharmaceuticals PLC and C.H. Boehringer Sohn AG & Co. KG,--Consent 
Agreement; File No. 151-0044'' on your comment and file your comment 
online at https://ftcpublic.commentworks.com/ftc/hikmabenconsent by 
following the instructions on the web-based form. If you prefer to file 
your comment on paper, write ``In the Matter of Hikma Pharmaceuticals 
PLC and C.H. Boehringer Sohn AG & Co. KG,--Consent Agreement; File No. 
151-0044'' 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: Jordan Andrew (202-326-3678), 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 February 19, 2016), 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 March 22, 2016. 
Write ``In the Matter of Hikma Pharmaceuticals PLC and C.H. Boehringer 
Sohn AG & Co. KG,--Consent Agreement; File No. 151-

[[Page 9470]]

0044'' 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/hikmabenconsent 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 ``In the Matter of Hikma 
Pharmaceuticals PLC and C.H. Boehringer Sohn AG & Co. KG,--Consent 
Agreement; File No. 151-0044'' 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 consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before March 22, 2016. 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 Order (``Consent 
Agreement'') from Hikma Pharmaceuticals PLC (``Hikma'') and C.H. 
Boehringer Sohn AG & Co. KG (``Boehringer'') that is designed to remedy 
the anticompetitive effects that otherwise would have resulted from 
Hikma's proposed acquisition of forty-nine Abbreviated New Drug 
Applications (``ANDAs'') from Ben Venue Laboratories, Inc. (``Ben 
Venue''), a subsidiary of Boehringer, in five generic injectable 
pharmaceutical markets. Boehringer recently exited the markets related 
to these ANDAs when it ceased its manufacturing and other operations 
through Ben Venue. Under the terms of the proposed Consent Agreement, 
Hikma is required to divest to Amphastar Pharmaceuticals, Inc. 
(``Amphastar'') the Ben Venue ANDAs it will acquire from Boehringer 
related to acyclovir sodium injection, diltiazem hydrochloride 
injection, famotidine injection, prochlorperazine edisylate injection, 
and valproate sodium injection.
    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, in order 
to make a final decision as to whether it should withdraw from the 
proposed Consent Agreement, or make final the Decision and Order 
(``Order'').
    Pursuant to a Sale and Purchase Agreement dated December 4, 2014 
(``Proposed Acquisition''), Hikma proposes to acquire forty-nine ANDAs 
from Boehringer for approximately $5 million. 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 future competition in the markets for acyclovir sodium 
injection, diltiazem hydrochloride injection, famotidine injection, 
prochlorperazine edisylate injection, and valproate sodium injection in 
the United States. The proposed Consent Agreement will remedy the 
alleged violations by replacing the competition that would otherwise be 
eliminated by the Proposed Acquisition.

I. The Relevant Products and Structure of the Markets

    The relevant products are all generic versions of injectable 
pharmaceutical products. Generic versions of these products are usually 
launched after a branded product's patents expire, or a generic 
supplier successfully challenges such patents in court or reaches a 
legal settlement with the branded manufacturer. 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, the generic suppliers compete only 
against each other. Sometimes, however, a branded injectable drug 
manufacturer may choose to lower its price and compete against generic 
versions of the drug, in which case it would be a participant in the 
generic drug market.
    The relevant products at issue and the structure of each of the 
relevant markets is as follows:
     Acyclovir sodium injection is an antiviral drug used to 
treat chicken pox, herpes, and other related infections. Three firms, 
Boehringer, Fresenius Kabi

[[Page 9471]]

AG (``Fresenius''), and AuroMedics Pharma LLC (``AuroMedics''), 
currently have ANDAs for this drug that have been approved by the U.S. 
Food and Drug Administration (``FDA''). Only Fresenius and AuroMedics 
currently supply acyclovir sodium injection to the market. Hikma and 
one other firm are likely to enter the market in the near future. The 
Proposed Acquisition would therefore reduce the number of likely future 
suppliers of acyclovir sodium injection from five to four.
     Diltiazem hydrochloride injection is a calcium channel 
blocker and antihypertensive used to treat hypertension, angina, and 
arrhythmias. There are four firms that currently have FDA-approved 
ANDAs for diltiazem hydrochloride injection, Hikma, Boehringer, 
Hospira, Inc. (``Hospira''), and Akorn, Inc. (``Akorn''), but only 
Hikma, Hospira, and Akorn currently supply the market. No other firms 
are likely to enter the market in the near future. Thus, the Proposed 
Acquisition would reduce the number of likely future suppliers of 
diltiazem hydrochloride injection from four to three.
     Famotidine injection treats ulcers and gastroesophageal 
reflux disease. Three firms currently sell the vial presentation of 
famotidine injection, Hikma, Fresenius, and Mylan N.V. Boehringer has 
an FDA-approved ANDA for famotidine injection vials, but had no sales 
of the drug in 2014. No other companies appear to be poised to enter 
the market in the near future. The Proposed Acquisition would therefore 
reduce the number of likely future suppliers of famotidine injection 
from four to three.
     Prochlorperazine edisylate injection is an antipsychotic 
used to treat schizophrenia and nausea. Boehringer owned virtually the 
entire market for prochlorperazine edisylate injection in 2013, but it 
exited the market in mid-2014. Since that time, Heritage 
Pharmaceuticals Inc. has assumed all sales of prochlorperazine 
edisylate injection. Hikma is the only other company that has an FDA-
approved ANDA for prochlorperazine edisylate injection, but it is not 
currently supplying the market. Another firm has prochlorperazine 
edisylate injection in its development pipeline and anticipates 
achieving FDA approval of its ANDA in the near future. Thus, the 
Proposed Acquisition would reduce the number of likely future suppliers 
of prochlorperazine edisylate injection from four to three.
     Valproate sodium injection is used to treat epilepsy, 
seizures, bipolar disorder, anxiety, and migraine headaches. There are 
two firms that currently supply valproate sodium injection in the 
market, Hikma and Fresenius. Boehringer has an FDA-approved ANDA for 
valproate sodium injection but exited the market in July 2014. Another 
firm has valproate sodium injection in its development pipeline and 
anticipates achieving FDA approval of its ANDA in the near future. 
Thus, the Proposed Acquisition would reduce the number of likely future 
suppliers of valproate sodium injection from four to three.

II. Competitive Effects

    The transaction will reduce competition by decreasing the number of 
future suppliers in in each of these markets; in generic pharmaceutical 
products, prices generally decrease as the number of competing generic 
suppliers increases. In addition, the injectable pharmaceutical 
industry generally, and the generic products at issue in this 
investigation in particular, are highly susceptible to supply 
disruptions caused by the inherent difficulties of producing sterile 
liquid drugs. Recent manufacturing problems have made it difficult for 
customers to obtain sufficient quantities of, and contributed to price 
increases of, several of the generic injectable products impacted by 
this transaction. By reducing the number of likely future competitors 
in these markets, the Proposed Acquisition will likely create a direct 
and substantial anticompetitive effect on prices for each of the 
relevant products, absent the remedies required by the proposed Consent 
Agreement.
    In each of the relevant markets, either Hikma or Boehringer, or 
both, currently do not supply an existing generic product. For markets 
in which Hikma is not a current competitor, it is likely to become one 
in the near future. Boehringer has recently exited each of these 
markets, but, absent the Proposed Acquisition, it would have had the 
incentive to sell these ANDAs to a third-party supplier who would 
likely bring these products to market. Hikma, which already has an 
approved ANDA or is likely to soon achieve FDA approval for an ANDA in 
each of the five relevant markets at issue, lacks that incentive, and 
thus, customers would be deprived of the price decreases that likely 
would have accompanied third-party entry into each of these 
concentrated markets.

III. Entry

    Entry into each of these generic injectable product markets will 
not be timely, likely, or sufficient in magnitude, character, and scope 
to deter or counteract the likely anticompetitive effects of the 
Proposed Acquisition. The combination of drug development times and 
regulatory requirements, including FDA approval, takes well in excess 
of two years.

IV. The Consent Agreement

    The Consent Agreement effectively remedies the Proposed 
Acquisition's anticompetitive effects in each relevant market. Under 
the Consent Agreement, Hikma is required to divest the Ben Venue ANDAs 
it will acquire from Boehringer related to acyclovir sodium injection, 
diltiazem hydrochloride injection, famotidine injection, 
prochlorperazine edisylate injection, and valproate sodium injection to 
Amphastar. Hikma must accomplish these divestitures and relinquish its 
rights no later than ten days after the acquisition.
    Amphastar is a global pharmaceutical company based in Rancho 
Cucamonga, California and has over 1,200 employees worldwide. The 
company owns five pharmaceutical manufacturing facilities and produces 
a variety of branded and generic pharmaceutical products. Amphastar 
manufactures and sells sixteen injectable drug products in the United 
States, as well as a broad range of other pharmaceutical dosage 
formulations, including emulsions, suspensions, jellies, and 
lyophilized products. The company sells most of its products through 
long-standing relationships with major group purchasing organizations, 
drug wholesalers, and retailers in the United States. With its 
experience in generic markets, and in injectable products in 
particular, Amphastar is expected to replicate fully the competition 
that would otherwise have been lost as a result of the Proposed 
Acquisition.
    The Commission's goal in evaluating possible acquirers of divested 
assets is to maintain the competitive environment that existed prior to 
the acquisition. If the Commission determines that Amphastar is not an 
acceptable acquirer, or that the manner of the divestitures or releases 
is not acceptable, the parties must unwind the sale or release of 
rights to Amphastar 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 
Boehringer to maintain the economic viability, marketability, and

[[Page 9472]]

competitiveness of the assets to be divested until they are transferred 
to Hikma, and requires Hikma to do the same until such time as they are 
transferred to a Commission-approved acquirer. The Order also requires 
that the parties transfer all confidential business information, 
regulatory, formulation, and manufacturing reports, as well as provide 
access to employees who possess or are able to identify such 
information. Because the products related to the Boehringer (Ben Venue) 
ANDA assets have already exited the market, the Order does not require 
a transitional supply agreement.
    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. 2016-04039 Filed 2-24-16; 8:45 am]
 BILLING CODE 6750-01-P