- Created on Monday, 14 April 2014 15:44
- Written by IVN
Washington, DC - Akorn Enterprises, Inc. and Hi-Tech Pharmacal, Inc. will sell the rights and assets to three generic prescription eye medications and two generic topical anesthetics to Watson Laboratories, Inc., to settle Federal Trade Commission charges that Akorn’s proposed $640 million acquisition of Hi-Tech would be anticompetitive and lead to higher prices for consumers.
The FTC complaint challenging the transaction alleges that the transaction would reduce competition in the markets for:
- Generic Ciloxan drops, which are eye drops used to treat bacterial eye infections and corneal ulcers. The proposed transaction would reduce from four to three the number of competitors in this already highly concentrated market.
- Generic Quixin drops, which are eye drops used to treat bacterial eye infections The acquisition would reduce the number of current competitors from three to two.
- Generic Xylocaine jelly, a topical anesthetic prescription drug, for which the proposed acquisition would reduce the number of competitors from three to two.
- Generic EMLA cream, a topical anesthetic prescription drug. The proposed transaction would leave only three remaining competitors, and give the merged firm more than 70 percent of the U.S. market.
Future competition would be reduced in the U.S. market for:
- Generic Ilotycin ointment, prescribed for bacterial eye infections, which is currently sold by three firms in the U.S. Hi-Tech is poised to enter the market in the near future. Akorn’s acquisition of Hi-Tech, therefore, would deprive consumers of the benefits of future competition that would come with Hi-Tech’s entry into this highly concentrated market.
More detailed information about each drug and relevant market can be found in the analysis to aid public comment for this matter.
The proposed order settling the FTC’s charges is designed to remedy the alleged anticompetitive effect of the proposed transaction. It requires the parties to sell either Akorn’s or Hi-Tech’s rights and assets to each of the five drug products to Watson, and requires Akorn to assign Watson its contract for making branded and generic EMLA cream within 10 days after the deal is consummated. If the FTC finds that Watson is not an acceptable acquirer of the drugs, it can require Akorn to unwind the sales and divest the drugs to another FTC-approved buyer within six months. Finally, the proposed order requires the companies to maintain the drugs to be sold as viable, marketable, and competitive pending their divestiture, and allows the FTC to appoint a monitor to ensure that the companies comply with the order’s requirements
The Commission vote to accept the 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 May 14, 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. Comments can also be submitted electronically.