Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Pfizer to divest four products to settle FTC concerns over Hospira acquisition, (Aug 24, 2015)

By Linda O’Brien, J.D., LL.M.

Pfizer Inc. has agreed to sell the rights and assets related to four pharmaceutical products in order to settle FTC charges that its proposed $16 billion acquisition of Hospira, Inc. is anticompetitive, the agency announced today. Pfizer is one of the world’s largest drug companies and principally competes with Hospira in markets for certain sterile injectable pharmaceutical products (In re Matter of Pfizer Inc., File No. 151-0074).

According to the FTC complaint, acetylcysteine inhalation solution is a mucolytic therapy used to treat certain respiratory disorders. In the United States, three companies supply generic acetylcysteine inhalation solution: Fresenius Kabi, which is partnered with Gland Pharma Ltd. and Pfizer; Hospira; and American Regent, Inc. Among the competitors, Fresenius/Gland/Pfizer is the market leader with an approximately 69 percent market share and Hospira has an approximately 22 percent share. The acquisition would reduce the number of suppliers from three to two.

The FTC settlement order preserves competition by requiring the companies to divest the following products to the U.S.-based generic pharmaceutical company Alvogen Group Inc.: (1) Pfizer’s generic acetylcysteine inhalation solution; (2) Hospira’s clindamycin phosphate injection; (3) Hospira’s voriconazole injection; and (4) Hospira’s melphalan hydrochloride injection.

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

The proposed order requires Pfizer to supply Alvogen with the clindamycin phosphate injection product for three years while Pfizer transfers the manufacturing technology to Alvogen or its designee. Pfizer also is required to provide transitional services to Alvogen to assist with establishing manufacturing capabilities and securing FDA approvals to market all of the divested products. The proposed order also allows the Commission to appoint a monitor to oversee the merging parties’ compliance with their obligations under the settlement agreement.

The FTC will publish the consent agreement package in the Federal Register shortly, which will be subject to public comment through September 23. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

Companies: Pfizer Inc.; Hospira, Inc.

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