[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Notices]
[Pages 68668-68671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26294]


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FEDERAL TRADE COMMISSION

[File No. 211 0101/Docket No. C-4754]


ANI/Novitium; 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 Proposed 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 January 3, 2022.

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: ``ANI/Novitium; 
File No. 211 0101'' 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.

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FOR FURTHER INFORMATION CONTACT: Kari Wallace (202-326-3085), Bureau of 
Competition, Federal Trade Commission, 400 7th Street SW, Washington, 
DC 20024.

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 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 January 3, 2022. 
Write ``ANI/Novitium; File No. 211 0101'' 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 protective actions in response to the COVID-19 pandemic and 
the agency's heightened security screening, postal mail addressed to 
the Commission will be delayed. We strongly encourage you to submit 
your comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``ANI/Novitium; 
File No. 211 0101'' 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 your comment does not include any sensitive or confidential 
information. In particular, your comment should not include 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 
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 https://www.regulations.gov--as legally required by FTC 
Rule 4.9(b)--we cannot redact or remove your comment from that 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 https://www.ftc.gov to read this Notice 
and the news release describing this matter. The FTC Act and other laws 
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 it receives on 
or before January 3, 2022. 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

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from ANI Pharmaceuticals, Inc. (``ANI'') and Novitium 
Pharma LLC and Esjay LLC (collectively, ``Novitium'') designed to 
remedy the anticompetitive effects resulting from ANI's acquisition of 
the non-corporate interests of Novitium. Pursuant to an agreement dated 
March 8, 2021, ANI proposes to acquire Novitium in a transaction valued 
at approximately $210 million. 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 
future competition in the following two U.S. markets: (1) Generic SMX-
TMP oral suspension; and (2) generic dexamethasone tablets. The Consent 
Agreement will remedy the alleged violations by preserving the 
competition that otherwise would be eliminated by the Proposed 
Acquisition.
    Under the terms of the proposed Decision and Order (``Order''), 
Respondents are required to divest all of ANI's rights and assets 
related to the following two products to Prasco LLC (``Prasco''): (1) 
Generic sulfamethoxazole-trimethoprim (``SMX-TMP'') oral suspension; 
and (2) generic dexamethasone tablets. The Commission and Respondents 
have agreed to an Order to Maintain Assets that requires Respondents to 
operate and maintain each divestiture product in the normal course of 
business until the products are ultimately divested to Prasco. The 
Commission also issued the Order to Maintain Assets.
    The 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 Consent 
Agreement, along with the comments received, to make a final decision 
as to whether it should withdraw from the Consent Agreement, modify it, 
or make final the proposed Order.

I. The Respondents

    Respondent ANI is a public specialty pharmaceutical company 
headquartered in Baudette, Minnesota selling both branded and generic 
pharmaceutical products.

[[Page 68670]]

    Respondent Novitium is a privately-held company based in East 
Windsor, New Jersey. The company develops, manufactures, and 
commercializes generic pharmaceutical products.

II. The Products and Structure of the Markets

    In human pharmaceutical markets, price(s) generally decreases as 
the number of generic competitors increase. Prices continue to decrease 
incrementally with the entry of the second, third, fourth, and further 
pharmaceutical competitors. Accordingly, a reduction in the number of 
suppliers within each relevant market has a direct and substantial 
effect on pricing.
    The Proposed Acquisition would reduce future competition in the 
SMX-TMP oral suspension market, where ANI is a current competitor and 
Novitium is likely to enter the market. Generic SMX-TMP oral suspension 
is an antibiotic product used to treat a variety of infections. Five 
companies, including ANI, currently market the product in the United 
States, but at least one has had difficulty manufacturing the product. 
Novitium is one of a limited number of suppliers capable of entering 
the market for SMX-TMP oral suspension in the near future.
    Similarly, the Proposed Acquisition would reduce future competition 
in the 4 mg strength of generic dexamethasone tablets market, where 
both ANI and Novitium are likely to enter the market in the near 
future. Generic dexamethasone tablets are an oral steroid product used 
to treat inflammation associated with a variety of conditions. 
Dexamethasone tablets are available in a variety of strengths, although 
the most widely used strength is the 4 mg strength. Only two companies 
sell the 4 mg strength of dexamethasone tablets in the United States 
today, and ANI and Novitium are two of a limited number of companies 
likely to enter the market in the 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 FDA, is costly and lengthy.

IV. Competitive Effects

    The Proposed Acquisition likely would delay or reduce the 
introduction of beneficial competition, and subsequent price decreases, 
by eliminating future competition in the two markets at issue. While 
five companies, including ANI, currently market the generic SMX-TMP 
product in the United States, at least one has had difficulty 
manufacturing the product, and Novitium is one of a limited number of 
suppliers capable of entering the market in the near future. In the 
generic dexamethasone tablets market, only two companies sell the 4 mg 
strength in the United States today and ANI and Novitium are two of a 
limited number of companies entering the market in the near future. 
Absent a remedy, the Proposed Acquisition likely would cause U.S. 
consumers to pay higher prices for the aforementioned generic products.

V. The Proposed Order and the Order To Maintain Assets

    The proposed Order and the Order to Maintain Assets effectively 
remedy the competitive concerns raised by the Proposed Combination for 
the two generic pharmaceutical product areas at issue. Pursuant to the 
proposed Order, the parties are required to divest ANI's rights and 
assets related to the two products to Prasco. The parties must 
accomplish these divestitures no later than ten days after the Proposed 
Combination is consummated. The proposed Order further allows the 
Commission to appoint a trustee in the event the parties fail to divest 
the products.
    While ANI and Novitium do not compete again each other in the 
market for generic erythromycin and ethylsuccinate granules for oral 
suspension, Novitium has an unexecuted option to acquire a product from 
another company and ANI sells a product today. The proposed Order 
requires prior Commission approval before ANI or Novitium may acquire 
any rights or interests in certain products containing, as the active 
pharmaceutical ingredients, erythromycin and ethylsuccinate. This 
provision allows the Commission to evaluate whether a future 
acquisition of the erythromycin and ethylsuccinate product would reduce 
competition at the time the acquisition is proposed. The proposed Order 
also requires ANI and Novitium to seek Commission approval before 
acquiring any other SMX-TMP or dexamethasone tablet product.
    The Commission's goal in evaluating possible purchasers of divested 
assets is to maintain the competitive environment that existed prior to 
the Proposed Combination. Prasco is a capable purchaser with management 
and employees who have experience marketing and distributing generic 
pharmaceutical products. It will be able to replicate the competition 
otherwise lost from the Proposed Combination.
    The proposed Order contains several provisions to help ensure the 
divestitures are successful. ANI will supply Prasco with SMX-TMP oral 
suspension and dexamethasone tablets for up to three years while the 
company transfers the manufacturing technology to Prasco's contract 
manufacturing designee. The proposed Order also requires ANI to provide 
transitional services to Prasco to assist it in establishing its 
manufacturing capabilities and securing all of the necessary FDA 
approvals. These transitional services include technical assistance to 
have the products manufactured in substantially the same manner and 
quality employed or achieved by ANI. It also includes advice and 
training from knowledgeable employees of the parties. Further, the 
proposed Order requires prior Commission approval before Prasco may 
sell, license, or otherwise convey any of the assets divested pursuant 
to the proposed Order.
    Under the proposed Order, the Commission also will appoint a 
Monitor to ensure ANI and Novitium comply with their obligations under 
the proposed Order and Order to Maintain Assets. The Commission has 
appointed Denise Smart of Smart Consulting Group, LLC as the Monitor. 
Ms. Smart is an expert in areas such as pharmaceutical R&D, regulatory 
approval, manufacturing and supply, and marketing, and she has over 
thirty years of experience in the pharmaceutical area and has provided 
consulting services in healthcare business development to major 
pharmaceutical companies, biotechnology companies, universities, and 
other government agencies, including the FDA, Department of Defense, 
and Health and Human Services.
    The proposed Order also contains a prior approval provision 
relating to Prasco, which prohibits Prasco from selling the acquired 
products for a combined period of ten years after the Order is issued, 
except to an acquirer that receives the prior approval of the 
Commission.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement and proposed Order to aid the Commission in 
determining whether it should make the proposed Order final. This 
analysis is not an official interpretation of the proposed

[[Page 68671]]

Order and does not modify its terms in any way.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-26294 Filed 12-2-21; 8:45 am]
BILLING CODE 6750-01-P