FTC Puts Conditions on Endo Health Solutions’ Acquisition of Boca Life Science Holdings

Pharmaceutical companies Endo Health Solutions Inc. (Endo) and Boca Life Science Holdings, LLC and Boca Pharmacal, LLC (Boca) have agreed to a settlement resolving Federal Trade Commission charges that Endo’s acquisition of Boca would be anticompetitive. Under the settlement, the companies will relinquish their rights to market and distribute four generic multivitamin fluoride drops for children, and will sell three other generic drugs in development. It is the latest action the FTC has taken to protect U.S. consumers from higher heath care-related costs.

The proposed settlement will preserve competition in the pharmaceutical markets for four prescription generic multivitamin drop products given to children in the United States who do not have access to fluoridated water:

• generic multivitamin drops containing 0.25mg fluoride (generic PolyViFlor 0.25mg drops);
• generic multivitamin drops containing 0.5mg fluoride (generic PolyViFlor 0.5mg drops);
• generic multivitamin drops with 0.25mg fluoride and iron (generic PolyViFlor 0.25mg drops with iron); and
• generic multivitamin drops with 0.25mg fluoride and folate (generic TriViFlor 0.25mg drops).

In addition, the FTC’s settlement will preserve future competition for three generic drugs:

• generic oral syrup containing brompheniramine maleate (2mg/5ml), dextromethorphan hydrobromide (10mg/5ml), and pseudoephedrine hydrochloride (30mg/5ml) (generic Bromfed-DM), which is used to treat symptoms of the common cold;
• generic oral solution containing hydrocodone (10mg/15ml) and acetaminophen (325mg/15ml ) (generic Zamicet), which is used to relieve moderate to severe pain; and
• generic acetic acid, glacial (2%) with hydrocortisone (1%) ear drops (generic Vosol HC), which are ear drops prescribed to treat “Swimmer’s Ear.”            

According to the FTC’s complaint, Endo’s acquisition of Boca as originally proposed likely would cause U.S. consumers to pay significantly higher prices for these generic drugs. Boca is the exclusive marketer and distributor of the four prescription multivitamin drop products, which are owned and manufactured by Sonar Products, Inc., and competes with Endo in the sale of these products. According to the complaint, the proposed acquisition also would eliminate one likely future entrant from a very limited pool of future entrants in each of the three other generic drug markets.

More information about the market shares of both companies and their competitors can be found in the analysis to aid public comment for this matter.

The proposed consent order requires Boca to return all of its rights to the four multivitamins to Sonar. It also requires Boca to continue distributing the four multivitamins for Sonar for up to six months, to allow Sonar time to find a new marketing and distribution partner to replace Boca.

The proposed order also requires Endo to sell all of its rights and interests in generic Bromfed-DM and generic Zamicet, and Boca’s rights and interests in generic Vosol HC to Rhodes Pharmaceuticals, Inc., within 10 days after the acquisition is completed. Endo and Boca must ensure the viability, marketability, and competitiveness of these three products until they are sold.

To ensure that Endo and Boca comply with the terms of the proposed order, the FTC has appointed Quantic Regulatory Services, LLC to act as an interim monitor until the divestitures have been completed successfully.

Endo, headquartered in Malvern, Pennsylvania, is a global company that develops, produces and markets pharmaceuticals and active pharmaceutical ingredients. Its top-selling products are hydrocodone/acetaminophen tablets, generic Percocet, and the painkiller oxycodone.

Boca, headquartered in Coral Springs, Florida is a specialty drug company that develops and sells generic prescription drugs nationwide. Under an agreement dated August 27, 2013, a subsidiary of Endo, Generics International (US) Inc., proposed to buy Boca for $225 million.

The Commission vote to accept the consent agreement containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through March 3, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also can be submitted electronically.

NOTE:  The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.