[Federal Register Volume 82, Number 249 (Friday, December 29, 2017)]
[Notices]
[Pages 61759-61762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28213]


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FEDERAL TRADE COMMISSION

[File No. 171 0140]


Becton, Dickinson and Company and C. R. Bard; 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 January 23, 2018.

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 
Becton Dickinson and Co./Bard, Inc., File No. 171 0140'' on your 
comment, and file your comment online at https://
ftcpublic.commentworks.com/ftc/

[[Page 61760]]

bectondickinsonconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``In the 
Matter of Becton Dickinson and Co./Bard, Inc., File No. 171 0140'' 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: Jared Nagley, Attorney, (212-607-2813) 
and Geralyn Trujillo, Attorney, (212-607-2806), Northeast Region, One 
Bowling Green, Suite 318, New York, New York 10004.

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 December 22, 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 January 23, 
2018. Write ``In the Matter of Becton Dickinson and Co./Bard, Inc., 
File No. 171 0140'' 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 website, 
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/bectondickinsonconsent 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 website.
    If you prefer to file your comment on paper, write ``In the Matter 
of Becton Dickinson and Co./Bard, Inc., File No. 171 0140'' 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 
website 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 website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
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 website 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 January 23, 2018. 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 Becton, Dickinson and Company (``BD'') and C. R. 
Bard, Inc. (``Bard'') (collectively, the ``Respondents'') that is 
designed to remedy the anticompetitive effects that would likely result 
from BD's proposed acquisition of Bard. The proposed Decision and Order 
(``Order'') requires the Respondents to divest all rights and assets 
related to Bard's tunneled home drainage catheter business and BD's 
soft tissue core needle biopsy device business to Merit Medical 
Systems, Inc. (``Merit''). The Order To Maintain Assets requires 
Respondents to maintain the viability and competitiveness of the 
businesses pending divestiture.
    Pursuant to an Agreement and Plan of Merger, dated as of April 23, 
2017, BD and Lambda Corp., a wholly-owned subsidiary of BD, will 
acquire the issued and outstanding shares of Bard by means of a merger 
in exchange for cash and stock valued at approximately $24 billion (the 
``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 substantially lessening 
competition in the U.S. markets for tunneled home drainage catheter 
systems and soft tissue core needle biopsy devices. The Consent 
Agreement

[[Page 61761]]

is designed to remedy the alleged violations by preserving the 
competition that otherwise would be lost in these markets as a result 
of the proposed Acquisition.
    The Commission has placed the Consent Agreement on the public 
record for 30 days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will again review the Consent 
Agreement, along with any comments received, and decide whether it 
should withdraw from the Consent Agreement, modify the Consent 
Agreement or Order, or make the Order final.

II. The Respondents

    BD, headquartered in Franklin Lakes, New Jersey, is a medical 
technology company that manufactures and sells a broad range of medical 
supplies, devices, laboratory equipment, and diagnostic products 
throughout the world. Its operations consist of two business segments: 
BD Medical and BD Life Sciences. BD Medical provides a broad array of 
medical technologies and devices to hospitals, clinics, physicians' 
office practices, pharmacies, pharmaceutical companies, and healthcare 
workers.
    Bard, headquartered in Murray Hill, New Jersey, is a medical 
technology company that manufactures medical, surgical, diagnostic, and 
patient care devices sold to hospitals, healthcare professionals, 
extended care facilities, and other medical facilities throughout the 
world. Its operations consist of four principal divisions: Bard Access 
Systems, Inc., Bard Medical Division, Bard Peripheral Vascular, Inc., 
and Bard Biopsy Systems.

III. The Relevant Markets and Structure of the Markets

A. Tunneled Home Drainage Catheter Systems

    Tunneled home drainage catheter systems are medical devices used to 
treat recurrent fluid buildup in the lungs and abdomen, conditions 
known as pleural effusions and malignant ascites, respectively. 
Patients suffering from these conditions, often due to cancer or other 
serious illnesses, commonly require frequent fluid drainage. Tunneled 
home drainage catheter systems drain fluid from the lungs (pleural 
drainage) or abdomen (peritoneal drainage) through a tunneled, 
indwelling catheter connected to a disposable receptacle. After a 
medical doctor places the indwelling catheter, the device allows fluid 
drainage to take place conveniently in a patient's home or in a hospice 
setting where the patient or a caregiver can attach, remove, replace, 
and dispose of the drainage receptacle as frequently as needed. 
Although patients requiring pleural or peritoneal drainage can undergo 
an outpatient medical procedure when fluid build-up becomes severe, 
such procedures are not suitable alternatives to tunneled home drainage 
catheter systems, because they require a patient to make repeated trips 
to a healthcare facility to see a doctor. Customers likely would not 
substitute outpatient medical procedures in response to a small but 
significant increase in the price of tunneled home drainage catheter 
systems.
    BD and Bard are the two largest manufacturers of tunneled home 
drainage catheter systems in the United States, with a combined market 
share of approximately 98%. The remaining market share is divided 
between Rocket Medical plc (``Rocket Medical'') and B. Braun Medical 
Inc. (``B. Braun''). Rocket Medical is a new entrant to the U.S. 
market, and both Rocket Medical and B. Braun, in addition to having a 
much smaller share of the market than BD and Bard, have far less 
recognition among U.S. customers.

B. Soft Tissue Core Needle Biopsy Devices

    Soft tissue core needle biopsy devices are used by medical 
clinicians, typically interventional radiologists or oncologists, to 
remove small samples of tissue from soft tissue organs for examination 
and diagnosis. There are no practical alternatives to soft tissue core 
needle biopsy devices for clinicians seeking to perform a soft tissue 
biopsy. Other biopsy devices, such as bone or bone marrow biopsy 
devices, are not approved or intended to be used for soft tissue 
biopsies. Soft tissue core needle biopsy devices do not include, and 
are distinguished from, vacuum-assisted biopsy (``VAB'') devices which 
employ a vacuum to remove larger tissue samples. VAB devices are used 
for breast biopsies involving lesions that are difficult to locate and 
are not used to perform biopsies of other soft tissues and organs. VAB 
devices are more complex devices that are sold at a significantly 
higher price than soft tissue core needle biopsy devices. Accordingly, 
customers likely would not switch to VAB devices in response to a small 
but significant increase in the price of soft tissue core needle biopsy 
devices.
    Bard and BD are the two largest manufacturers of soft tissue core 
needle biopsy devices in the United States, with a combined market 
share of 60% or greater. Other participants in the market include Cook 
Medical, Argon Medical Devices, Inc., and Hologic, Inc., but each of 
these manufacturers has a smaller market share than either Bard or BD. 
In addition, there is a fringe of other manufacturers with very small 
market shares.

C. The Relevant Geographic Market

    The relevant geographic market for both tunneled home drainage 
catheter systems and soft tissue core needle biopsy devices is the 
United States. These relevant products are medical devices regulated by 
the U.S. Food and Drug Administration (``FDA''). Medical devices sold 
outside of the United States, but not approved for sale in the United 
States, are not viable competitive alternatives for U.S. consumers.

IV. Competitive Effects of the Transaction

    The proposed Acquisition would likely substantially lessen 
competition in the U.S. markets for tunneled home drainage catheter 
systems and soft tissue core needle biopsy devices. The Acquisition 
would combine the largest and second-largest suppliers of both products 
in the United States and would substantially increase concentration in 
already highly concentrated markets. Under the Horizontal Merger 
Guidelines, the Acquisition would presumptively create or enhance 
market power. By eliminating direct and substantial competition between 
Respondents, the proposed Acquisition likely would allow the combined 
firm to exercise market power unilaterally, resulting in higher prices 
and/or reduced innovation.

V. Entry

    Entry in 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. New entry into 
the markets for each of these devices is difficult, time-consuming, and 
expensive, requiring a significant investment of time and money for 
product research and development, regulatory approval by the FDA, and 
the establishment of a sales and marketing infrastructure sufficient to 
develop customer awareness and acceptance of the products.

VI. The Proposed Consent Agreement

    The Consent Agreement remedies the competitive concerns raised by 
the proposed Acquisition by requiring the Respondents to divest all of 
the assets, facilities, and resources relating to

[[Page 61762]]

Bard's tunneled home drainage catheter systems business and BD's soft 
tissue core needle biopsy devices business to Merit. The provisions of 
the Consent Agreement will enable Merit to become an independent, 
viable, and effective competitor in the respective relevant markets and 
maintain the competition that currently exists.
    Merit, headquartered in South Jordan, Utah, is a global company 
with 30 years of experience in the development, manufacture, and 
distribution of medical devices used in interventional, diagnostic, and 
therapeutic procedures. Merit offers a portfolio of products that is 
highly complementary to the tunneled home drainage catheter systems 
being acquired. Merit also recently introduced its first soft tissue 
core needle biopsy device product. Merit possesses substantial industry 
expertise in these product areas and sells its products to similar 
customers as BD and Bard. For these reasons, Merit is well positioned 
to restore the benefits of competition that would be lost due to the 
Acquisition.
    Pursuant to the Order, Merit will receive all rights and assets 
related to Bard's tunneled home drainage catheter system business and 
BD's soft tissue core needle biopsy device business, including all of 
the confidential business information used in those businesses. Merit 
will own or receive a license to all intellectual property necessary to 
run the businesses. It will also acquire the equipment used in the 
manufacturing of the products and all documentation and other 
information related to the products. Respondents will also contract 
manufacture products for Merit until it is able to manufacture them 
itself, and Respondents will provide transitional services to Merit to 
assist the company in establishing manufacturing capabilities for the 
divested products.
    The Respondents must accomplish the divestitures no later than 10 
days after the consummation of the proposed Acquisition. If the 
Commission determines that Merit is not an acceptable acquirer, or that 
the manner of the divestitures is not acceptable, the proposed Order 
requires the Respondents to unwind the sale of assets to Merit and then 
divest the assets to a Commission-approved acquirer(s) within 180 days 
of the date the Order becomes final. Pursuant to the Order To Maintain 
Assets, Respondents must maintain the businesses pending divestiture.
    The Commission has agreed to appoint a Monitor to ensure that the 
Respondents comply with all of their obligations pursuant to the 
Consent Agreement and to keep the Commission informed about the status 
of the transfer of assets to Merit. The Commission has appointed Mazars 
LLP as the Monitor in this matter. The proposed Order further allows 
the Commission to appoint a trustee in the event the parties fail to 
divest the products as required.

VII. Opportunity for Public Comment

    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement to aid the Commission in determining whether it 
should make the Order final. This analysis is not intended to 
constitute an official interpretation of the proposed Consent Agreement 
and does not modify its terms in any way.

    By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2017-28213 Filed 12-28-17; 8:45 am]
BILLING CODE 6750-01-P