[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Notices]
[Pages 40411-40413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17460]
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FEDERAL TRADE COMMISSION
[File No. 191 0039]
Boston Scientific Corporation; Analysis of Agreement Containing
Consent Orders To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement; Request for Comment.
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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 of Agreement Containing Consent Orders 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 September 13, 2019.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``Boston Scientific
Corporation; File No. 191 0039'' on your comment, and file your comment
online at https://www.regulations.gov by following the instructions on
the web-based form. If you prefer to file your comment on paper, 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: Jonathan Ripa (202-326-2230), Bureau
of Competition, Federal Trade Commission, 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
[[Page 40412]]
Home Page (for August 7, 2019), 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 September 13,
2019. Write ``Boston Scientific Corporation; File No. 191 0039'' 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 https://www.regulations.gov website.
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 through the https://www.regulations.gov website.
If you prefer to file your comment on paper, write ``Boston
Scientific Corporation; File No. 191 0039'' 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
website at https://www.regulations.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 September 13, 2019. 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 Boston Scientific Corporation (``BSC'') designed to
remedy the anticompetitive effects resulting from BSC's proposed
acquisition of BTG plc (``BTG''). The proposed Decision and Order
(``Order'') contained in the Consent Agreement requires BSC to divest
all rights and assets related to its drug eluting bead (``DEB'')
business, as well as its closely related bland bead business, to Varian
Medical Systems (``Varian'').
The proposed Consent Agreement has been placed on the public record
for thirty days for receipt of comments by interested persons. Comments
received during this period will become part of the public record.
After thirty days, the Commission will review the comments received and
decide whether it should withdraw, modify, or make the Consent
Agreement final.
Under the terms of the Co-Operation Agreement dated November 20,
2018, BSC will acquire BTG in exchange for cash consideration of $4.2
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. market for DEBs. The proposed Consent
Agreement will remedy the alleged violations by preserving the
competition that otherwise would be lost in this market as a result of
the proposed Acquisition.
II. The Parties
BSC, headquartered in Marlborough, Massachusetts, is a global
supplier of medical devices that are used in a broad range of
interventional medical specialties. BSC currently offers its products
through seven core business segments: Interventional Cardiology,
Cardiac Rhythm Management, Endoscopy, Peripheral Interventions, Urology
and Pelvic Health, Neuromodulation, and Electrophysiology. The
Peripheral Interventions segment--which includes BSCs DEB business--
focuses on products that treat an array of diseases, including arterial
diseases, vascular diseases, as well as various cancers.
BTG is headquartered in London, England, with operational
headquarters in Conshohocken, Pennsylvania. The company develops,
manufacturers, and sells products used in various interventional
medicine applications, and it also has a portfolio of specialty
pharmaceutical products.
III. The Relevant Product and Structure of the Market
DEBs are microscopic beads used in transarterial chemoembolization
(``TACE'') procedures for treating primary and secondary liver cancers.
TACE involves the use of embolic agents (typically microscopic beads)
mixed with chemotherapy drugs (often doxorubicin) that are delivered to
the targeted tumor in the liver via a catheter inserted into the
patient's artery that leads to the tumor. When used in TACE procedures,
DEBs work by blocking the flow of blood to the liver tumor, causing it
to shrink over time, while simultaneously slowly releasing a
chemotherapy agent that also attacks the tumor.
[[Page 40413]]
BTG and BSC are the two leading suppliers of DEBs in the United
States and are each other's closest competitors. The only other
participant in the U.S. DEB market is Merit Medical (``Merit''), which
is substantially smaller than either BSC or BTG.
IV. The Relevant Geographic Market
The United States is the relevant geographic market in which to
assess the competitive effects of the proposed Acquisition. DEBs are
medical devices that are regulated by the U.S. Food and Drug
Administration (``FDA''). As such, DEBs sold outside the United States,
but not approved for sale in the United States, do not provide viable
competitive alternatives for U.S. consumers.
V. Competitive Effects of the Acquisition
The proposed Acquisition would likely result in substantial
competitive harm to consumers in the market for DEBs. The parties are
two of only three significant suppliers of DEBs in the United States.
Eliminating the head-to-head competition between BSC and BTG in this
highly concentrated market would allow the combined firm to exercise
market power unilaterally, resulting in higher prices, reduced
innovation, and less choice for consumers.
VI. Entry Conditions
Entry in the relevant market 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
would require significant investment of time and money for product
research and development, regulatory approval by the FDA, developing
clinical history supporting the long-term efficacy of the product, and
establishing a U.S. sales and service infrastructure. Such development
efforts are difficult, time-consuming, and expensive, and often fail to
result in a competitive product reaching the market.
VII. The Consent Agreement
The Consent Agreement eliminates the competitive concerns raised by
the proposed Acquisition by requiring BSC to divest its DEB business
and closely related bland bead business to Varian. A sale of BSC's DEB
business without its bland business could undermine the divestiture's
effectiveness. The two products share key intellectual property, and
BSC manufactures bland beads on the same production line as DEBs. Thus,
including the bland bead business in the divestiture package will
ensure that Varian has outright ownership of all necessary intellectual
property and allow it to manufacture DEBs at a cost and output level
comparable to that of BSC. BSC must divest all assets and rights to
research, develop, manufacture, market, and sell the BSC DEB and bland
bead products, including all related intellectual property and other
confidential business information, manufacturing technology, existing
inventory, and all related agreements to manufacture and distribute the
products. Additionally, to ensure that the divestiture is successful
and maintain continuity of supply, the proposed Order requires BSC to
supply Varian with DEBs and bland beads for a limited time while Varian
establishes its own manufacturing capability. The provisions of the
Consent Agreement ensure that Varian becomes an independent, viable,
and effective competitor in the U.S. market in order to maintain the
competition that currently exists.
Headquartered in Palo Alto, California, Varian operates globally
and develops, manufactures, and markets a variety of medical devices
and software for treating cancer and other medical conditions. Varian's
existing interventional oncology business includes products that are
highly complementary to the divestiture assets. Varian has the
expertise, U.S. sales infrastructure, and resources to restore the
competition that otherwise would have been lost due to the proposed
Acquisition.
BSC must accomplish the divestitures no later than ten days after
consummating the proposed Acquisition. If the Commission determines
that Varian is not an acceptable acquirer, or that the manner of the
divestitures is not acceptable, the proposed Order requires BSC to
unwind the sale of rights and assets to Varian and then divest the
affected products to a Commission-approved acquirer within six months
of the date the Order becomes final. To ensure compliance with the
Order, the Commission has agreed to appoint a Monitor to ensure that
BSC complies with all of its obligations pursuant to the Consent
Agreement and to keep the Commission informed about the status of the
transfer of the DEB and bland bead rights and assets to Varian. The
proposed Order further allows the Commission to appoint a trustee in
the event that BSC fails to divest the products as required.
The purpose of this analysis is to facilitate public comment on the
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.
April J. Tabor,
Acting Secretary.
[FR Doc. 2019-17460 Filed 8-13-19; 8:45 am]
BILLING CODE 6750-01-P