FTC Requires Mylan to Sell Rights to Seven Generic Pharmaceuticals as a Condition of Acquiring Perrigo Company

Mylan N.V. has agreed to sell the rights and assets related to seven generic drugs in order to settle FTC charges that its proposed acquisition of Perrigo Company plc would be anticompetitive.

Both companies market generic drugs globally, and according to the FTC complaint, as originally proposed, the acquisition would likely harm competition in U.S. markets for seven generic pharmaceutical products. The settlement order preserves competition by requiring Mylan to divest the rights and assets in these product markets to the New Jersey-based generic pharmaceutical company Alvogen Group Inc.

The complaint alleges that the proposed acquisition would likely have harmed current competition in U.S. markets for four generic drugs. In these markets, both Mylan and Perrigo either are currently selling the drugs, or have approval of the Food and Drug Administration to do so:

• Bromocriptine mesylate is used to treat conditions including type 2 diabetes and Parkinson’s disease.
• Clindamycin phosphate/benzoyl peroxide is used to treat acne.
• Liothyronine sodium is used to treat hypothyroidism and to treat or prevent enlarged thyroid glands.
• Polyethylene glycol 3350 is a laxative used to treat occasional constipation.

The FTC’s settlement also will preserve future competition for three generic drugs. According to the complaint, the proposed acquisition would eliminate at least one likely future entrant from a very limited pool of future entrants in each of these markets:

• Acyclovir is used to slow the growth and spread of the herpes virus in the body.
• Hydromorphone hydrochloride is used to treat moderate to severe pain in narcotic-tolerant patients.
• Scopolamine prevents symptoms associated with motion sickness and helps patients recover from anesthesia and surgery.

The proposed buyer, Alvogen, has the necessary resources, financial and technical capabilities, and experience marketing generic pharmaceutical products to replace successfully the competition that otherwise would have been lost through the proposed acquisition.

To ensure that the divestitures succeed, the proposed order requires Mylan to provide Alvogen with transitional services, including technical assistance. Further details about the divestitures are set forth in the analysis to aid public comment for this matter.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 4-0. 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 December 3, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed 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@ftc.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.