[Federal Register Volume 85, Number 92 (Tuesday, May 12, 2020)]
[Notices]
[Pages 28007-28010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10081]


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FEDERAL TRADE COMMISSION

[File No. 191 0169]


AbbVie Inc. and Allergan plc; Analysis of Consent Order 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 to Aid Public Comment describes both the 
allegations in the 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 June 11, 2020.

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. Please write: ``AbbVie and 
Allergan; File No. 191 0169'' 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, please 
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, 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 of Agreement Containing Consent Orders 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 website (for 
May 5, 2020), at this web address: 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 June 11, 2020. 
Write ``AbbVie and Allergan; File No. 191 0169'' 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.
    Due to the public health emergency in response to the COVID-19 
outbreak and the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your

[[Page 28008]]

comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``AbbVie and 
Allergan; File No. 191 0169'' 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 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 this matter. 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 June 11, 2020. 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 Consent Order 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 AbbVie Inc. (``AbbVie'') and Allergan plc 
(``Allergan'') designed to remedy the anticompetitive effects resulting 
from AbbVie's proposed acquisition of Allergan. The proposed Decision 
and Order (``Order'') contained in the Consent Agreement requires 
Allergan to divest all rights and assets related to its Zenpep and 
Viokase products to Nestl[eacute] S.A. (``Nestl[eacute]''). The 
proposed Order also requires that Allergan return its rights and assets 
related to brazikumab to AstraZeneca plc (``AstraZeneca'').
    The proposed Consent Agreement has been placed on the public record 
for thirty days so that interested persons may submit comments. 
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.
    Pursuant to a Scheme of Arrangement under Irish law, AbbVie will 
acquire all of the voting securities of Allergan from its shareholders 
for approximately $63 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 (1) 
prescription drugs for the treatment of exocrine pancreatic 
insufficiency (``EPI''); (2) Interleukin-23 (``IL-23'') inhibitors for 
the treatment of moderate-to-severe Crohn's disease; and (3) IL-23 
inhibitors for the treatment of moderate-to-severe ulcerative colitis. 
The proposed Consent Agreement will remedy the alleged violations by 
preserving the competition that otherwise would be lost in these 
markets as a result of the proposed Acquisition.

II. The Parties

    Headquartered in North Chicago, Illinois, AbbVie researches, 
develops, manufactures, and sells prescription pharmaceutical products 
and biologic products in several therapeutic areas, including 
immunology, oncology, virology, neuroscience, and women's health. Among 
other products, AbbVie sells a product to treat EPI and is developing 
an IL-23 inhibitor to treat moderate-to-severe Crohn's disease and 
ulcerative colitis. Like AbbVie, Allergan researches, develops, 
manufactures, and sells prescription pharmaceutical products in the 
United States. Among its products, Allergan also sells a product to 
treat EPI and is developing an IL-23 inhibitor to treat moderate-to-
severe Crohn's disease and ulcerative colitis.

III. The Relevant Products and Structure of the Markets

A. Drugs for the Treatment of Exocrine Pancreatic Insufficiency

    EPI is a condition that results from a deficiency of pancreatic 
enzymes. Patients who have EPI cannot properly digest fats, proteins, 
and carbohydrates in the foods they eat and, as a result, may suffer 
from malnutrition and have uncomfortable gastrointestinal symptoms when 
they eat. EPI is treated using pancreatic enzyme products. Pancreatic 
enzyme products contain the active ingredient pancrelipase, a mixture 
of the digestive enzymes amylase, lipase, and protease that is 
extracted from the pancreas of a pig.
    Only four companies sell prescription pancreatic enzyme product in 
the United States: AbbVie, Allergan, Vivus Inc. (``Vivus''), and Chiesi 
USA, Inc. (``Chiesi''). AbbVie is the clear market leader with its 
product, Creon, and Allergan is the second-largest supplier, with its 
product, Zenpep. Vivus sells Pancreaze and Chiesi sells Pertzye. 
Allergan also sells a second pancreatic enzyme product, Viokase, 
although its sales in the United States are much more limited. 
Together, AbbVie and Allergan have a share of more than 95

[[Page 28009]]

percent of the market for drugs to treat EPI.

B. Interleukin-23 Inhibitors for the Treatment of Moderate-to-Severe 
Crohn's Disease and for the Treatment of Moderate-to-Severe Ulcerative 
Colitis

    Ulcerative colitis and Crohn's disease are the most common causes 
of chronic inflammation of the digestive tract. Both diseases have 
similar symptoms--severe diarrhea, abdominal pain, fatigue, and weight 
loss--and both can be debilitating and lead to life-threatening 
complications. The location of the inflammation is the primary 
difference between the two diseases: Ulcerative colitis is a continuous 
inflammation of the colon, affecting only the innermost lining, while 
Crohn's disease can occur anywhere between the mouth and the anus, has 
healthy parts of the digestive tract between inflamed parts, and can 
occur in all layers of the bowel walls. Because the diseases are 
similar, drugs that are effective in treating ulcerative colitis are 
also typically effective in treatment Crohn's disease (and vice versa), 
but the United States Food and Drug Administration (``FDA'') requires 
that companies seeking ulcerative colitis and Crohn's disease 
indications for drugs conduct separate clinical studies and submit 
separate applications to market drugs for each indication.
    Various drugs are approved to treat ulcerative colitis and Crohn's 
disease, but the effectiveness for most drugs is limited. IL-23 
inhibitors are a new class of drugs to treat both diseases. Johnson & 
Johnson's Stelara is the only IL-23 inhibitor currently approved to 
treat moderate-to-severe Crohn's disease and ulcerative colitis in the 
United States. Stelara is both an IL-23 inhibitor and an Interleukin-12 
inhibitor. Only three other companies--AbbVie, Allergan, and Eli Lilly 
and Company--have IL-23 inhibitors in late-stage development for 
ulcerative colitis and Crohn's disease. Allergan is developing 
brazikumab and AbbVie is developing Skyrizi.

IV. The Relevant Geographic Market

    The United States is the relevant geographic market in which to 
assess the competitive effects of the proposed Acquisition. Drugs to 
treat EPI and drugs to treat moderate-to-severe ulcerative colitis and 
Crohn's disease are prescription pharmaceutical products and regulated 
by FDA. As such, products 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 markets for prescription drugs for 
the treatment of EPI, IL-23 inhibitors for the treatment of moderate-
to-severe Crohn's disease, and IL-23 inhibitors for the treatment of 
moderate-to-severe ulcerative colitis. Together, AbbVie and Allergan 
account for more than 95 percent of the market for drugs to treat EPI, 
and they are two of a limited number of companies in late-stage 
development with IL-23 inhibitors to treat moderate-to-severe 
ulcerative colitis and Crohn's disease.

VI. Entry Conditions

    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 
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 the combined company to divest 
Allergan's Zenpep and Viokase business, including its regulatory 
approvals, intellectual property, contracts, and inventory to 
Nestl[eacute], and Allergan's brazikumab business to AstraZeneca. 
AbbVie and Allergan also must transfer all business information, 
research and development information, regulatory, formulation, and 
manufacturing reports related to the divested products, as well as 
provide access to knowledgeable employees to assist in the transfer. 
The provisions of the Consent Agreement ensure that Nestl[eacute] and 
AstraZeneca become independent, viable, and effective competitors in 
the U.S. markets.
    Nestl[eacute] is the world's largest food and beverage company, 
operating in more than 190 countries around the world. While the 
company is most well-known for its chocolate products, it also operates 
Nestl[eacute] Health Science, an integrated health company that focuses 
on nutrition products, including enteral feeding products that are used 
in hospitals and at home by patients who are unable to chew or swallow 
food. Nestl[eacute]'s existing business includes products that are 
highly complementary to the divestiture assets. Nestl[eacute] has the 
expertise, U.S. sales infrastructure, and resources to restore the 
competition that otherwise would have been lost due to the proposed 
Acquisition.
    AstraZeneca is a global research-based pharmaceutical company 
specializing in researching, developing, manufacturing, and marketing 
prescription products. AstraZeneca was responsible for conducting some 
of the early phase clinical studies for brazikumab, but out-licensed 
the product to Allergan in 2016. AstraZeneca is a well-qualified buyer 
for brazikumab because, as the original innovator of the product, it 
already has experience developing brazikumab prior to out-licensing it 
to Allergan, and, further, the key team members who were previously 
responsible for brazikumab's development are still employed by the 
company and will take responsibility for the developing the product. 
With its resources, capabilities, and previous experience with 
brazikumab, AstraZeneca is well positioned to successfully develop and 
commercialize the product and thereby replace the competition that 
otherwise would have been lost through the proposed Acquisition.
    AbbVie and Allergan must accomplish the divestitures no later than 
ten days after consummating the proposed Acquisition. If the Commission 
determines that Nestl[eacute] or AstraZeneca are not acceptable 
acquirers, or that the manner of the divestitures is not acceptable, 
the proposed Order requires AbbVie and Allergan to unwind the sale of 
rights and assets and then divest the affected product to a Commission-
approved acquirer within six months of the date the Order becomes 
final. The Commission has agreed to appoint a Monitor to ensure that 
AbbVie and Allergan comply with all of their obligations pursuant to 
the Consent Agreement and to keep the Commission informed about the 
status of the transfer of the rights and assets to the buyers. The 
proposed Order further allows the Commission to appoint a trustee in 
the event that AbbVie and Allergan fail 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.

[[Page 28010]]

    By direction of the Commission.

April J. Tabor,
Acting Secretary.
[FR Doc. 2020-10081 Filed 5-11-20; 8:45 am]
BILLING CODE 6750-01-P