Announced Actions for March 18, 2003

The Commission has received a petition from Solvay S.A. (Solvay) to reopen and modify the Commission's hold separate order regarding Solvay's acquisition of Ausimont S.p.A. In its petition, which is available on the Commission's Web site as a link to this press release, Solvay states that Paragraph III.C.5 of the hold separate order prohibits Solvay from retaining the services of the Solvay Fluoropolymers Manager appointed pursuant to Paragraph III.C.1 to manage the businesses required to be held separate pending their divestiture, for two years after the termination of the hold separate order. The FTC appointed Gary Mularski, an employee of Solvay Fluoropolymers, Inc. as the Solvay Fluoropolymers Manager. The hold separate order was terminated on January 21, 2003, when Solvay divested the required assets to Dyneon LLC. Solvay now seeks to hire Mularski to work at a business unit not related to relevant entities and has accordingly petitioned the Commission to modify the terms of the hold separate order to eliminate the two-year waiting period. A letter from Dyneon attached to Solvay's petition states that Dyneon does not object to Solvay hiring Mularski.

The Commission is accepting public comments on the petition until April 16, 2003, after which it will determine whether to approve it. Solvay has, however, requested that the FTC shorten the comment period, and if this request is approved, the Commission may consider the petition prior to the end of the 30-day period. Comments should be sent to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. (FTC File No. 021-0067; Docket No. C-4046, staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press release dated May 2, 2002.)

Issuance of staff advisory opinions

In two separate letters, the staff of the FTC's Bureau of Competition has advised counsel for Arkansas Children's Hospital (ACH) in Little Rock, Arkansas, and Valley Baptist Medical Center (VBMC) in Harlingen, Texas, that the Non-Profit Institutions Act (NPIA) covers: 1) ACH's sale of pharmaceuticals to patients seen in clinics that are located on ACH's campus but are operated by the University of Arkansas for Medical Sciences (UAMS); and 2) VMBC's sale of pharmaceuticals to contracted workers who provide services at VMBC. The NPIA exempts from the Robinson-Patman Act "purchases of their supplies for [the buyer's] own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit." The letters, signed by Jeffrey W. Brennan, Assistant Director of the Health Care Products and Services Division of the Bureau of Competition, are available on the FTC's Web site.

ACH is a free-standing nonprofit children's hospital that maintains a close and multifaceted academic affiliation with UAMS. ACH operates many specialty clinics on its campus that are staffed by UAMS-employed doctors. UAMS also operates three outpatient clinics located on the ACH campus. Many patients are seen by both UAMS and ACH clinics on the same day. ACH asked whether the sale of prescription drugs by its outpatient pharmacy to patients of clinics located at ACH but operated by UAMS would be covered by the Act.

The staff letter concludes that ACH and UAMS, both of which are eligible entities under the Act, have established a joint venture to care for pediatric patients at the full range of outpatient clinics operated on the ACH campus. Based on the close collaboration between the two institutions in the operation of ACH itself and all of the clinics located there, the letter expresses the opinion that pharmaceuticals dispensed to UAMS clinic patients would be purchased for ACH's own use within the meaning of the NPIA.

VBMC is a not-for-profit hospital that has about 200 contracted workers who provide food and laundry services on hospital premises. These workers work exclusively at VBMC, and some work there for long periods of time. They are not, however, employees of VBMC, but of an intermediary contracting firm. VBMC's aim in seeking the FTC advisory opinion is to provide reduced-price prescription drugs to these workers from the hospital pharmacy.

Based on the reasoning of Supreme Court's opinion in Abbott Laboratories v. Portland Retail Druggists Association, 425 U.S. 1 (1976), which held that pharmaceuticals dispensed to hospital employees are covered by the NPIA, the staff letter concludes that pharmaceuticals dispensed to the VBMC contract workers, in the circumstances disclosed in the hospital's request letter, are purchased for VBMC's "own use" within the meaning of the NPIA. The workers perform services that are integral to the hospital's care of its patients, and VBMC articulated plausible reasons why providing pharmaceuticals to these workers may increase workers' productivity to the direct benefit of the hospital. (Staff contact is Jeffrey Brennan, Bureau of Competition, 202-326-3688.)

NOTE: These letters, which are available on the FTC's Web site, set out the views of the staff of the FTC's Bureau of Competition, as authorized by the Commission's Rules of Practice. As the Commission's Rules explain, the staff's advice is rendered "without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding."

Commission approval of proposed divestiture

The Commission has approved an application for a proposed divestiture pursuant to its consent agreement and order with Biovail Corporation (Biovail). Under the terms of the order, which became final on August 20, 2002, Biovail is required to "divest absolutely, in good faith, and only in a manner that receives prior approval of the Commission," all exclusive licenses to U.S. Patent No. 6,162,463 in the Tiazac field. Tiazac is an extended release formulation of the drug diltiazem. Through its application, Biovail requested FTC approval of an amendment to an existing agreement between Biovail and DOV Pharmaceuticals (DOV) that would return to DOV the exclusive license to U.S. Patent No. 6,162,463 in the Tiazac Field. Through the action announced today, the Commission has approved this request by a vote of 5-0. (FTC File No. 011-0094, Docket No. C-4060; staff contact is Roberta Baruch, Bureau of Competition, 202-326-2861; see press releases dated April 23, August 2, August 20, and October 4, 2002.)

Commission authorization to file amended complaint

The Commission has authorized the staff to file a second amended complaint in the pending court matter regarding 1st Beneficial Credit Services, et al. The Commission brought this complaint as part of "Operation No-Credit." The complaint concerns the alleged telemarketing of nonexistent credit cards and the debiting of consumers' checking accounts. Through this action, the FTC intends to add Glen Stevens as a defendant in this matter. The Commission vote authorizing the staff to file the amended complaint was 5-0. (File No. X020097, Civ. No. 1:02CV1591; staff contact is Michael Milgrom, FTC East Central Region, 216-263-3419; see press releases dated September 5 and 24, 2002.)

Commission approval of final consent order

Following a public comment period, the Commission has approved the issuance of a final consent order in the matter concerning Dainippon Ink and Chemicals, Inc.'s acquisition of certain assets of the Bayer Corporation. The Commission vote to approve the final consent order was 5-0. (FTC File No. 021-0100, staff contact is Jay C. Campbell, Bureau of Competition, 202-326-3129; see press release dated January 31, 2003.)

Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Call toll-free: 1-877-FTC-HELP.