[Federal Register Volume 82, Number 145 (Monday, July 31, 2017)]
[Notices]
[Pages 35526-35528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16017]


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FEDERAL TRADE COMMISSION

[File No. 171 0052]


Baxter International Inc., Claris Lifesciences Limited, and Arjun 
Handa; 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 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 August 21, 2017.

ADDRESSES: Interested parties may file a comment 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 
Baxter International Inc., File No. 171-0052'' on your comment, and 
file your comment online at https://ftcpublic.commentworks.com/ftc/baxterclarisconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``In the 
Matter of Baxter International Inc., File No. 171-0052'' 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: Kari Wallace (202-326-3085), 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 July 20, 2017), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 21, 2017. 
Write ``In the Matter of Baxter International Inc., File No. 171-0052'' 
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 https://www.ftc.gov/policy/public-comments.
    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/baxterclarisconsent by following the instructions on the web-based 
form. If this Notice appears at http://

[[Page 35527]]

www.regulations.gov/#!home, you also may file a comment through that 
Web site.
    If you prefer to file your comment on paper, write ``In the Matter 
of Baxter International Inc., File No. 171-0052'' 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.
    Because your comment will be placed on the publicly accessible FTC 
Web site at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC Web site--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC Web site, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC Web site 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 
August 21, 2017. For information on the Commission's privacy policy, 
including routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Baxter International Inc. (``Baxter'') and Claris 
Lifesciences Limited and Arjun Handa (collectively ``Claris'') that is 
designed to remedy the anticompetitive effects resulting from Baxter's 
acquisition of voting securities of certain entities and related assets 
from Claris. Under the terms of the proposed Consent Agreement, the 
parties are required to divest all of Claris's rights and assets 
related to fluconazole in saline intravenous bags and milrinone in 
dextrose intravenous bags to Renaissance Lakewood LLC 
(``Renaissance'').
    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 any 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 agreements dated December 15, 2016, Baxter proposes to 
acquire voting securities of certain entities and related assets from 
Claris in two related transactions valued at approximately $625 million 
(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 market for fluconazole in saline intravenous 
bags and future competition in the market for milrinone in dextrose 
intravenous bags 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.

II. The Products and Structure of the Markets

    The Proposed Acquisition would reduce the current competition in 
the market for fluconazole in saline intravenous bags, and reduce 
future competition in the market for milrinone in dextrose intravenous 
bags.
    Fluconazole is an antifungal agent used to treat a variety of 
fungal and yeast infections. Five companies currently sell generic 
intravenous fluconazole bags in the United States: Baxter, Claris, 
Pfizer Inc. (``Pfizer''), Sagent Pharmaceuticals, and Hikma 
Pharmaceuticals PLC (``Hikma''), but only four of these companies are 
significant competitors. Baxter and Claris have a combined estimated 
market share of nearly 60%.
    Intravenous milrinone is a vasodilator that dilates the blood 
vessels, lowering blood pressure and allowing blood to flow more easily 
through the cardiovascular system. The product is used as a short-term 
treatment for life-threatening heart failure. Three companies--Baxter, 
Hikma, and Pfizer--currently sell the product in the United States. 
Claris is expected to enter this market shortly, once its pending 
application at the FDA is approved, a development expected to occur in 
the very near future.

III. Entry

    Entry into the two markets at issue 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.

IV. Effects

    The Proposed Acquisition likely would cause significant 
anticompetitive harm to consumers by eliminating current competition 
between Baxter and Claris in the market for fluconazole in saline 
intravenous bags. Fluconazole in

[[Page 35528]]

saline intravenous bags is a commodity product, and prices typically 
are 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 only four 
significant companies selling the product, likely leading consumers to 
pay higher prices. Customers also have indicated that the presence of 
an independent Claris has allowed them to negotiate lower prices for 
fluconazole bags.
    In addition, the Proposed Acquisition likely would cause 
significant anticompetitive harm to consumers by eliminating future 
competition that would otherwise have occurred if Baxter and Claris 
remained independent in the market for milrinone in dextrose 
intravenous bags. The evidence shows that the Proposed Acquisition, 
absent a remedy, would eliminate an additional independent entrant in 
the currently concentrated market for milrinone in dextrose intravenous 
bags, which would have enabled customers to negotiate lower prices. 
Customers and competitors have observed--and pricing data confirms--
that the price of these pharmaceutical products decreases with new 
entry even after several other suppliers have entered the market. Thus, 
absent a remedy, the Proposed Acquisition likely will cause U.S. 
consumers to pay significantly higher prices for milrinone in dextrose 
intravenous bags in the future.

V. The Consent Agreement

    The proposed Consent Agreement effectively remedies the competitive 
concerns raised by the acquisition in both markets at issue by 
requiring Claris to divest all its rights to fluconazole in saline 
intravenous bags and milrinone in dextrose intravenous bags to 
Renaissance. Renaissance is a pharmaceutical corporation that develops, 
manufacturers, sells, and distributes injectable pharmaceutical 
products in the United States. The parties must accomplish these 
divestitures no later than ten days after they consummate the Proposed 
Acquisition.
    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 of the divestitures 
is not acceptable, the proposed Order requires the parties 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 in the event 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. Baxter will supply 
Renaissance with fluconazole in saline intravenous bags and milrinone 
in dextrose intravenous bags for up to five years while the company 
transfers the manufacturing technology to Renaissance or its contract 
manufacturing designee. The proposed Order also requires Baxter to 
provide transitional services to Renaissance to assist it in 
establishing its manufacturing capabilities and securing all of the 
necessary FDA approvals. These transitional services include technical 
assistance to manufacture fluconazole in saline intravenous bags and 
milrinone in dextrose intravenous bags in substantially the same manner 
and quality employed or achieved by Claris. It also includes advice and 
training from knowledgeable employees of the parties. Under the 
proposed Consent Agreement, the Commission also will appoint an Interim 
Monitor.
    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. 2017-16017 Filed 7-28-17; 8:45 am]
 BILLING CODE 6750-01-P