FTC Requires Divestitures in Connection With Impax Laboratories Inc.’s Proposed Acquisition of CorePharma, LLC

Pharmaceutical companies Impax Laboratories Inc. and CorePharma, LLC have agreed to divest all of CorePharma’s rights and assets to generic pilocarpine tablets and generic ursodiol tablets, in order to settle  Federal Trade Commission charges that Impax’s proposed $700 million acquisition of CorePharma would likely be anticompetitive. Perrigo Company plc, a global drug company headquartered in Ireland that markets generic drugs in the United States, will acquire the divested assets. Under the proposed settlement, Impax and CorePharma must also provide transitional services and take all actions that are necessary for Perrigo to obtain FDA approval to manufacture and market generic pilocarpine and ursodiol tablets.

Without the divestitures required by the proposed order, the FTC alleges that the acquisition would reduce the number of future suppliers in the markets for generic pilocarpine tablets, which are used to treat dry mouth, and generic ursodiol tablets, which are used to treat biliary cirrhosis, a chronic disease of the liver, as well as gall bladder diseases. CorePharma’s entry as an independent competitor would likely have resulted in significantly lower prices for each of these drugs.

According to the FTC’s complaint, there are currently only two suppliers in the market for generic pilocarpine tablets, and Impax and CorePharma are the only likely new entrants into this market in the near future.  In the market for generic ursodiol tablets, there are currently four suppliers, including Impax.  This market has recently experienced supply shortages, which can diminish competition among suppliers.  CorePharma is one of a limited number of firms likely to enter the generic ursodiol market in the near future.   

More information about the FTC’s consent agreement can be found in the analysis to aid public comment. The Commission vote to issue the complaint and accept the proposed consent order for public comment was 5-0.  The FTC will publish 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 April 6, 2015, 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 “Supplementary Information” section of the Federal Register notice. 

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 per day.

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, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. 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.