Notice2021-26294
ANI/Novitium; Analysis of Agreement Containing Consent Orders To Aid Public Comment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 3, 2021
Issuing agencies
Federal Trade Commission
Abstract
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.
Full Text
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<title>Federal Register, Volume 86 Issue 230 (Friday, December 3, 2021)</title>
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[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Notices]
[Pages 68668-68671]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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
<a href="https://www.regulations.gov">https://www.regulations.gov</a> 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.
[[Page 68669]]
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: <a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>--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 <a href="https://www.ftc.gov">https://www.ftc.gov</a> 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
<a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
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
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</html>Indexed from Federal Register on December 3, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.