[Federal Register Volume 81, Number 44 (Monday, March 7, 2016)]
[Notices]
[Pages 11792-11794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04884]


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FEDERAL TRADE COMMISSION

[File No. 151 0198]


Hikma Pharmaceuticals PLC; 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 March 29, 2016.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/hikmaroxaneconsent 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,--Consent Agreement; File No. 151-0198'' on your 
comment and file your comment online at https://ftcpublic.commentworks.com/ftc/hikmaroxaneconsent 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,--Consent 
Agreement; File No. 151-0198'' 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: Jacqueline Mendel (202-326-2603), 
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 26, 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 29, 2016. 
Write ``In the Matter of Hikma Pharmaceuticals PLC,--Consent Agreement; 
File No. 151-0198'' 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/hikmaroxaneconsent 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,--Consent Agreement; File No. 151-0198'' 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 29, 2016. You can find

[[Page 11793]]

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 Hikma Pharmaceuticals PLC (``Hikma'') that is 
designed to remedy the anticompetitive effects resulting from Hikma's 
acquisition of Roxane Laboratories, Inc. and Boehringer Ingelheim 
Roxane, Inc. (jointly, ``Roxane'') from Boehringer Ingelheim 
Corporation (``BI''). Under the terms of the proposed Consent 
Agreement, Hikma must divest all of its rights and assets related to 5 
mg, 10 mg, and 20 mg generic prednisone tablets and to generic lithium 
carbonate capsules to Renaissance Acquisition Holdings LLC 
(``Renaissance''), and to divest all marketing rights and ownership 
interests in generic flecainide tablets to Unimark Remedies Ltd 
(``Unimark'').
    The Commission has placed the proposed Consent Agreement 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'').
    Pursuant to a Stock Purchase Agreement dated July 28, 2015, Hikma 
proposed to acquire 100% of the issued and outstanding shares of Roxane 
for approximately $2.65 billion. On February 10, 2016, the purchase 
price was reduced to approximately $2 billion (the ``Proposed 
Acquisition''). 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 
competition in the markets for 5 mg, 10 mg, and 20 mg generic 
prednisone tablets and in the generic lithium carbonate capsules 
market, and future competition in the market for generic flecainide 
tablets in the United States. The proposed Consent Agreement will 
remedy the alleged violations by preserving the competition that the 
Proposed Acquisition would otherwise eliminate.

I. The Products and Structure of the Markets

    The Proposed Acquisition would reduce the number of current 
suppliers in the markets for 5 mg, 10 mg, and 20 mg generic prednisone 
tablets and for generic lithium carbonate capsules, and reduce the 
number of future suppliers in the market for generic flecainide 
tablets.
    Prednisone is a corticosteroid that prevents the release of 
substances in the body that cause inflammation. It is used to treat 
arthritis, allergies, and other conditions. Prednisone is also 
prescribed as an immunosuppressant medication. Generic prednisone is 
available in six tablet strengths: 1 mg, 2.5 mg, 5 mg, 10 mg, 20 mg, 
and 50 mg. Hikma and Roxane both market three of the six tablet 
strengths: 5 mg, 10 mg, and 20 mg. In addition to Hikma and Roxane, 
Endo International plc, Allergan, Inc., and Jubilant Cadista 
Pharmaceuticals, Inc. also offer 5 mg, 10 mg, and 20 mg generic 
prednisone tablets in the United States.
    Lithium carbonate capsules are prescribed for the treatment of 
manic episodes of bipolar disorder and for the maintenance treatment of 
bipolar disorder. Lithium therapy reduces the frequency of manic 
episodes and diminishes the intensity of episodes when they occur. In 
addition to Hikma and Roxane, two other firms currently supply generic 
lithium carbonate capsules in the United States: Glenmark 
Pharmaceuticals Ltd. and Camber Pharmaceuticals Inc.
    Flecainide acetate is an antiarrhythmic drug used to prevent and 
treat abnormally fast heart rhythms. Four firms currently market 
generic flecainide tablets: Roxane, Amneal Pharmaceuticals, ANI 
Pharmaceuticals, Inc., and Citron Pharma. Hikma owns the U.S. marketing 
rights to a generic flecainide in development at Unimark Remedies Ltd. 
Hikma is one of few suppliers that can enter the United States market 
in the near future.

II. Entry

    Entry into 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. 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 competition 
between Hikma and Roxane in the markets for 5 mg, 10 mg, and 20 mg 
generic prednisone tablets and in the generic lithium carbonate capsule 
market. Market participants characterize both generic prednisone 
tablets and generic lithium carbonate capsules as commodity products, 
and prices are typically inversely correlated with the number of 
competitors in each market. As the number of suppliers offering a 
therapeutically equivalent drug increases, the price for that drug 
generally decreases due to the direct competition between the existing 
suppliers and each additional supplier. The Proposed Acquisition would 
combine two of five companies offering the 5 mg, 10 mg, and 20 mg 
strengths of generic prednisone tablets, and two of four firms offering 
generic lithium carbonate capsules, likely leading consumers to pay 
higher prices.
    In addition, the Proposed Acquisition likely would harm consumers 
by eliminating future generic competition that would otherwise have 
occurred in the generic flecainide market if Hikma and Roxane remained 
independent. The Proposed Acquisition would likely harm competition by 
eliminating an additional independent entrant in the market for generic 
flecainide. Customers view the price of this pharmaceutical product as 
less competitive than it would be in a market with more participants, 
including Hikma. Thus, absent a remedy, the Proposed Acquisition would 
likely cause U.S. consumers to pay significantly higher prices for 
generic flecainide tablets.

IV. The Consent Agreement

    The proposed Consent Agreement effectively remedies the competitive 
concerns raised by the acquisition by requiring Hikma to divest all its 
rights and assets relating to 5 mg, 10 mg, and 20 mg generic prednisone 
and those relating to generic lithium carbonate capsules to 
Renaissance. Established in 2010 and based in Newtown, Pennsylvania, 
Renaissance is a privately held pharmaceutical company that 
manufactures and markets both generic and branded prescription drugs in 
the United States. In addition, the proposed Consent Agreement requires 
Hikma to return its rights to market generic flecainide tablets in the 
United States to Unimark, along with its equity interest in Unimark.
    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 Renaissance 
is not an acceptable acquirer, or that the manner

[[Page 11794]]

of the divestitures is not acceptable, the proposed Order requires 
Hikma to unwind the sale of rights to Renaissance and then 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 should the parties fail to divest the 
products as required.
    The proposed Consent Agreement and Order contain several provisions 
to help ensure that the divestitures are successful. The proposed Order 
requires that Hikma supply Renaissance with 5 mg, 10 mg, and 20 mg 
generic prednisone tablets and with generic lithium carbonate capsules 
for eighteen months while Hikma transfers the manufacturing technology 
to Renaissance's facility. The proposed Order also requires Hikma to 
provide a back-up supply of active pharmaceutical ingredient for 
generic prednisone tablets should the need for it arise. To ensure the 
success of these divestitures, the proposed Order requires Hikma to 
provide transitional services to assist Renaissance in establishing its 
manufacturing capabilities and securing all of the necessary FDA 
approvals. The transitional services include technical assistance to 
manufacture the product in substantially the same manner and quality 
employed or achieved by Hikma, and advice and training from 
knowledgeable employees of the parties. In addition, to ensure that 
Hikma complies with the terms of the Consent Agreement, the Commission 
has appointed Owen Richards of Quantic Regulatory Services, LLC as the 
Interim Monitor.
    To remedy competitive concerns raised by the acquisition in the 
market for generic flecainide tablets, the proposed Order requires 
Hikma to divest its approximately 23% ownership interest in Unimark and 
to return to Unimark all rights it has to commercialize generic 
flecainide tablets in the United States. Unimark has selected another 
firm, Bion Pharma, of Princeton, New Jersey, to market generic 
flecainide tablets in the United States upon the product's approval by 
the FDA.
    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. 2016-04884 Filed 3-4-16; 8:45 am]
BILLING CODE 6750-01-P